‘Scam controversy’ Nikola founder Milton sells 3.5 million shares

Input 2021.04.05 13:38

The founder of Trevor Milton of Nikola, a hydrogen electric vehicle company in the U.S., which was surrounded by a “fraud” controversy, has been confirmed to have sold 3.5 million shares of Nikola’s stock, major foreign media such as the Financial Times (FT) and Bloomberg News reported on the 3rd (local time).

According to foreign media reports, Milton secured $49 million (about 55.2 billion won) by selling 3.5 million Nikola shares on the 31st of last month at the closing price of 13.89 dollars. The sale of Milton’s stake was revealed on the 2nd, two days after the actual transaction took place.

Nikola, named after the genius electrical engineer Nikola Tesla (1856-1943), is a start-up in Arizona that has pledged to “make and sell hydrogen trucks”. It was founded in 2014 by Trevor Milton, 38, a businessman from Utah, USA.

Prior to the founding of Nicola, Milton founded and managed several companies, dHybrid Systems, a company specializing in natural gas storage technology. The Dehydride System was later merged with Worthington Industries, Inc., a leading US steelmaker.

When Nikola was founded, it was expected to be’the second Tesla’, but as it was engulfed in a controversy about fraud, it is being evaluated as’a company that has no substance but only a good vision’.

Nicola hasn’t made a car yet. Nevertheless, it was not unusual to receive suspicions because the stock price jumped nearly three times after listing on the NASDAQ Exchange through a merger with a company for acquisitions (SPAC, SPAC) in June of last year, then plummeted and rebounded again (Nicolas). The market cap of the company was briefly exceeding the market cap of Hyundai Motors after a week of listing).

General Motors (GM), an American automaker, announced in September last year that it would invest $2 billion and secure an 11% stake in Nikola. But shortly after GM’s plans to invest in Nikola were unveiled, Nikola’s share price plummeted when financial intelligence firm Hindenberg Research released a report alleging Nicola was a fraudulent.

Milton countered that Hindenberg Research’s claims were false. However, in December of last year, GM announced that it would withdraw its investment plan, and Nikola’s share price continued to decline. Currently, the US Department of Justice and the Securities and Exchange Commission (SEC) are investigating Nikola.

Milton remains the largest shareholder with a 21% stake in Nikola despite the sale. Nikola’s CEO, Mark Russell, is the second largest shareholder with a stake close to 11%.