Nikola dives 30% after founder Trevor Milton steps down as executive chairman
- Nikola tanked as much as 30% on Monday after its founder, Trevor Milton, voluntarily stepped down as the executive chairman and a member of the board.
- Stephen Girsky, a former vice chairman of General Motors, took the reins as the company's chairman after Nikola's board approved Milton's proposal, Nikola said on Sunday.
- Nikola shares have traded with massive volatility since the short-selling firm Hindenburg Research accused the automaker of lying about its technology and order book.
- While Milton's departure is likely to be viewed as "a major near-term gut punch" by Wall Street, the stock is still in a "prove me" phase with plenty of time to meet its goals, the Wedbush analyst Dan Ives said Monday.
- Watch Nikola trade live here.
Nikola shares tanked as much as 30% on Monday after its founder, Trevor Milton, voluntarily stepped down as the executive chairman and a member of the board.
The electric-vehicle company announced the surprise shake-up on Sunday. Nikola's board accepted Milton's proposal, and Stephen Girsky, a former vice chairman of General Motors, now serves as Nikola's chairman.
"Nikola is truly in my blood and always will be, and the focus should be on the company and its world-changing mission, not me," Milton said in a statement.
Shares retraced losses through the morning but still sat well below their Friday closing level.
The company's stock has traded with outsize volatility in recent weeks since the short-selling firm Hindenburg Research on September 10 accused Nikola of lying about its technology and order book. Nikola said Hindenburg's report was "not accurate" and described it as "a hit job for short sale profit driven by greed."
Milton slammed the short-sellers again in a Monday tweet, saying he planned to defend himself "against false allegations leveled against me by outsized detractors."
Still, Nikola's rebuttal hasn't cleared up the short-seller dilemma. Bloomberg reported last week that the Securities and Exchange Commission was investigating Hindenburg's claims and whether Nikola may have violated securities laws.
The company's leadership shift arrives at a pivotal moment for the growing firm. GM took an 11% stake in Nikola earlier this month as the industry giant rushes to compete with other zero-emissions-vehicle manufacturers. Though Hindenburg's report sparked some concerns about the deal, GM CEO Mary Barra told investors last week that the company conducted "appropriate diligence" on the $2 billion deal.
The GM partnership is a "linchpin" in Nikola's success, the Wedbush analyst Dan Ives said in a Monday note. While Wall Street is likely to view Milton's departure as "a major near-term gut punch" to Nikola's valuation, the firm is still a "prove me" stock with time to execute on its key goals, he said.
Nikola closed at $34.19 per share on Friday.
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