Shares of Nikola (NASDAQ:NKLA) stock are hurting on Friday after the firm confirmed misleading statements from its founder.
The electric vehicle (EV) company said in its annual filing with the Securities and Exchanges Commission (SEC) that ousted founder and chairman Trevor Milton made several inaccurate statements while at the helm of Nikola. In fact, in the filing, Nikola “highlighted nine comments by Milton from July 2016 through July 2020 that were ‘inaccurate in whole or in part, when made.’”
What else should NKLA stock investors know about this update from the company? Let’s take a closer look.
- Milton left Nikola back in September after short-seller Hindenburg Research made fraud claims against the company.
- In turn, this report spurned multiple federal inquiries and Nikola hired a law firm to conduct its own internal investigation.
- Following the internal review, the company discovered these nine quotes from Milton that were problematic.
- According to CNBC, “the inaccurate statements ranged from owning rights to natural gas wells to the company’s ability to produce hydrogen, among other misstatements.”
- “The company also said Milton’s claims that the Nikola One prototype semi-truck was fully functional was among the many misstatements, which the company previously admitted,” it added.
- At this point, Nikola has paid $8.1 million for Milton’s legal fees due to an indemnification agreement he has with the company.
- This amount is apart of the $27.5 million in legal expenses “primarily related to regulatory and legal matters incurred in connection with the claims by Hindenburg Research.”
- The EV firm also shared its fourth-quarter results on Thursday.
- This included better-than-expected losses per share of 17 cents, above analysts’ estimates of a 23-cent loss.
- “In the fourth quarter of 2020, Nikola made the necessary changes to refocus and realign the company,” Nikola CEO Mark Russell said.
NKLA stock was down 9.2% as of Friday morning.
On the date of publication, Nick Clarkson did not have (either directly or indirectly) any positions in the securities mentioned in this article.
Nick Clarkson is a web editor at InvestorPlace.