Once upon a time (which time was a little over two years ago), a short-seller called Hindenburg Research called electric-truck maker Nikola Corp. an “intricate fraud,” which is a nice way of saying not an electric-truck maker at all, but a “total farce,” which is a less nice way of saying it. What Hindenburg meant was that Nikola was hiding the fact that it wasn’t actually making any trucks behind an “ocean of lies” spouted by founder Trevor Milton.
Despite the vociferous protests lodged by Nikola, investors believed Hindenburg. Then federal prosecutors and the Securities and Exchange Commission did, too. Eventually, Nikola itself came around to some degree, acknowledging that Hindenburg’s damning report was perhaps not as entirely “replete with misleading information” as it had once suggested.
And now joining this growing chorus of consensus are 12 of Milton’s peers.
Jurors found him guilty on one count of securities fraud and both of the wire fraud counts.
Milton will be sentenced on Jan. 27. He faced up to 25 years in prison if convicted on all four counts….
“On the backs of those innocent investors taken in by his lies, he became a billionaire virtually overnight,” Assistant U.S. Attorney Nicolas Roos said in his opening statement in September.
Stock-market investors in SPACs that merged with private companies since 2015 lost an average 37% of their investment a year after the merger through the end of September, according to the authors of a forthcoming paper on SPACs in the Review of Financial Studies, an academic journal.
At the same time, SPAC managers, known as sponsors, turned an average investment of about $8 million into about $54 million, giving them average annualized returns of 110% on their initial investment in the SPACs, the authors found…. Share prices of more than one-third of the 339 SPACs that have merged with private companies since 2020 are down more than 80%, according to the data-tracking firm SPAC Research.
And whose number include, obviously, Nikola. Which means, at the very least, a soupçon of additional financial justice in this case.
Milton still owns Nikola stock…..
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