Nikola's Deceptive SPAC Valuation
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A story about how Nikola Motors, an electric vehicle company, allegedly deceived investors with fake product demonstrations.
"Nikola Motors was basically like this fake Tesla. They literally took the name - Tesla was the inventor's last name, Nikola was his first name. Tesla was successful, so he names his company Nikola and claims that's not why he did it, but obviously it is.
Takes the company public via a SPAC, runs up to this $40 billion valuation. Then somebody's like 'Hey, have you ever seen a Nikola car on the streets?' Nobody had ever seen a truck of theirs. It's questionable if it even exists.
They had one video of their truck, and it's basically just going downhill. They just had a truck, put it in neutral, and let it roll. They're like 'Look, electric self-driving truck!'
Eventually, the CEO Trevor Milton had to resign. He forfeits some of his stock but gets away with $1 billion still. He's charged by the DOJ with securities fraud this year. At his peak, he had like a $10 billion fortune, now it's a $1 billion fortune, but likely to lose it all."
Shaan Puri
Host of MFM
Shaan Puri is the Chairman and Co-Founder of The Milk Road. He previously worked at Twitch as a Senior Director of Product, Mobile Gaming, and Emerging Markets. He also attended Duke University.