It was no secret that General Motors (NYSE: GM) was excited with is Nikola (NASDAQ: TSLA) deal, even while Hindenburg Research fired scathing accusations at Nikola's business and practices. Nikola fired back, calling these claims false and suggesting Hindenburg was only doing this to short-sell them because of their stock spike. Unfortunately for Nikola, Hindenburg seemed to be right in at least one of their claims; that Nikola's truck was not moving under its own power in an ad. Nikola dodged their claim by saying their ad only claimed the video was of their truck "in motion", and never claimed the truck was moving on its own.
Despite it all, GM still reported to be excited about their partnership, saying there was no downside for them. GM was expected to finalize the $2 billion deal without any more mishaps, until fraud and sexual abuse allegations came agains founder and now former executive chairman, Trevor Milton.
Hindenburg had leveled more claims at Milton, calling Nikola "intricate fraud built on dozens of lies" according to CNBC. And two women stepped forward to claim Milton sexually abused them, both when they were only 15. While GM had declined to comment on the new accusations, critics wondered if GM had done its due diligence before brokering a deal with Nikola. However, with Milton stepping down from his position, it seems the deal is back on.
Nikola shares surges 31% as news of their deal with GM is working towards being finalized, but that doesn't quite cover the pandemic and allegation induced 37% fall. Originally the deal was supposed to have closed Sept. 30, however it seems both companies remain in discussion due to recent events. Milton, even though he has stepped down, is denying the fraud allegations from Hindenburg, but had declined to comment on the two sexual abuse allegations. While the deal currently seems to be in good standing between Nikola and GM, only time will tell if it finally goes through.