U.S. Justice Department is looking into Nikola claims: Report
Yahoo Finance's Ines Ferrre joins Yahoo Finance’s The First Trade with Alexis Christoforous and Brian Sozzi to discuss multiple reports that the U.S. Justice Department is looking into Nikola claims.
Video Transcript
BRIAN SOZZI: It's safe to say that Nikola has lost its market darling status for now. Ines, now the US Justice Department is sniffing around the EV maker.
INES FERRE: That's right. The FTC that the-- says that the-- excuse me, "The Financial Times" says that the US Justice Department is probing the company based on that Hindenburg short seller report. You can see right now the stock, actually it had opened lower this morning. There's a spike here around 10:00-- just shortly after 10:00. So that may be some type of headline that came out.
The stock right now is up more than 2%. But yesterday, the stock was down 8% after Hindenburg came out with a statement saying basically that Nikola's response to its short seller report, a response that had more details in it on Monday had more holes-- had holes big enough to roll a truck through it. And Hindenburg saying that it had posed some more than 50 questions, and that Nikola really only addressed 10 of those questions, and that it admitted, essentially, that the Nikola One truck in a video a couple of years ago was rolling down a hill.
Now you've got this DOJ inquiry, perhaps the SEC. We also have a report that the SEC is looking into this. Although Nikola says that it approached the SEC about it.
I do want to mention something interesting that actually came out in a Bloomberg report. And this is that Jeffrey Ubben-- he's the top shareholder and board member of Nikola-- said in a phone interview that investors are focusing too much on Nikola's past and ignoring the future of this company, that this is an ecosystem of a company, saying look at the long term. This will be a supplier of hydrogen for different vehicles, and also saying that he regrets pushing the startup and Trevor Milton, the founder of this startup, to go public before it was ready.
He said "we're doing something for the first time. I guess you're seeing how the sausage is made. And we went public way too early. And it's my fault. I pushed Trevor to do it." Over the last several days, week, you can see that the stock is very volatile.
BRIAN SOZZI: Heck of a story there.
