It does sound pretty bad, doesn't it? The guy certainly seems to have a problem with telling the truth. I think it's crazy to compare him to Musk, since Musk is actually extremely smart and knowledgeable about multiple areas of engineering. This other guy is just parotting the same lines, like "we are an advanced energy company that just happens to sell cars!". It's like the cargo-cult version of Tesla without any interesting technology or innovation. All that being said, I hope the author of this write-up has a good lawyer!
Musk has also had some interesting/uneasy relationship history with the truth. This guy does seem to be taking it quite a bit farther and leaving a lot more daylight visible between his statements and the truth.
Musk has a history of building and shipping successful products company after company in spite of a constant amount of people saying he would fail. (X.com, Paypal, Tesla, SpaceX, Neuralink, Boring).
Nikola is a complete fraud that collected money from know-nothing investors riding on EVs and Tesla's name. They haven't shipped anything and probably never will. Bizarrely positively portrayed in the press alongside negative Tesla stories - I imagine because it's good for clicks?
I find it hard to believe the SPAC that brought them public wasn't solely for the purpose of allowing them to steal as much as they could from the public before they shut down. No idea how well they played it - I guess we'll see if anyone ends up in prison.
Musk has actually delivered ground breaking tech in multiple fields though. He talks big but he usually (eventually) backs it up. No other company has managed to send rockets to space and then land them again. No other company has managed to sell fully electric cars en-masse like Tesla has done.
I'm no Musk fanboy and this isn't meant to be a defense of Musk, but in my opinion, Musk exaggerates and over promises. He'll say intentionally vague things and let people fill in the blanks and not correct them when they are wrong. It's all a little slimy and grey, but there's usually at least a modicum of truth to the things he says or he at least believes what he's saying at the time he says it.
From what I've heard recently Nikola just seems like straight up lies and fraud from trying to piggy back on the success of Tesla.
Neither are good, but one is much worse in my opinion.
The FTC should look into Musk's statements about self-driving, how it's almost done, etc. All that does is trick Tesla owners into paying for the $8000 upgrade for a product that will never, ever come, guaranteed. It just won't happen and he keeps peddling the product like it's only a year away, for the last several years. It's outright fraud and he should be taken to task for it. And for the record, I'm a Tesla-owner.
If you set an unrealistic goal that you won't accomplish but try really hard to reach it, in most cases your end result and the progress you made along the way will be far far better than when you set a realistic goal and reach it.
I always set unrealistic bars for myself. And in the end I get more from not reaching my goal than I would from reaching a lower one.
You're pointing at exactly what allows a skilled conman to succeed: To a casual, or even non-expert observer, the difference between a genius and a skilled impersonation of a genius will appear very small. You might not be able to make the distinction, and erroneously consider them equivalent.
It sounds bad, but I thought of another way to look at it.
Nikola's product is the brand of being a hip, "with it" electric car company, like Tesla, but different, and they are selling it to GM. It's a simple straightforward win-win, and everything that looks like fakery is beside the point. It has solid value to GM precisely because of the inflated, arguably irrational value of Tesla.
Now, I'm not investing, but it did occur to me to look at it that way. They are not actually in the same business as Tesla or GM. They're laundering cool factor.
I really like the cargo cult note. There are a lot of people building runways in the jungle hoping planes will land and bring cargo, so to speak, in tech. These people can and do make it into public markets (see Nikola) but it’s even more prevalent in private markets. It’s more important than ever to have technical people in private equity, not just VC.
> The guy certainly seems to have a problem with telling the truth.
I actually disagree with this take but it gets close to the problem with Trevor Milton. Trevor is very unpolished. I'm skeptical of how detailed he gets with all the in's and out's with the technologies he's trying to innovate and make more efficient. What's going for him is a few things, he's partnering with many companies which means he's mitigating the company's risk. Now that Musk created the market, others want to join in and try whatever route that sticks.
Musk on the other hand, speaks in more precise words when describing a topic. Musk does sell vaporware but...eventually (behind 'schedule') Musk delivers. This lazy focus on manifesting a specific vision what what Musk is doing. He'll let the entire engineering department go, if they aren't willing to work hard at making the future a reality.
Going full circle, the energy density of hydrogen fuel cell is the future. I don't see how it's not. All you need now is for Toyota to join forces with them and you'll have an unstoppable force that will help reduce emission drastically and at a large scale. The technology is very close (1, maybe 2 iterations away) and I doubt they are far away from a breakthrough. I don't believe Milton could've focused on Hydrogen semi's prior to the success of Tesla, he doesn't have that skill but...he's making due with what he's after. He's also being wise at selling electric trucks too because the market is primed for it (read: Musk primed it).
In conclusion, there are a lot of investors deep into Nikola. If Milton gets in the way of bringing this realistic engineering challenge to market, the investors will change it up. I'm not certain of how much voting say that Milton has but...it's a good sign that he stepped back from CEO role. He's way too sloppy with his words but...he brings the hype and investors are still wanting his hype. It's messy but nothing worth doing is ever blameless.
P.S. I don't own either stock. Nor any energy/battery/car/electric stocks. I'm just interested in advancing our technology.
> Going full circle, the energy density of hydrogen fuel cell is the future.
Based on what? Just looking at the density is not enough. You have to look at the whole system from generation to actually driving.
The hydrogen system is even in the best case, assume multiple many, many improvements in mass manufacturing and so on, only half as efficient as an electric system.
Battery technology is improving at a far faster rate then hydrogen technology, its not even remotely close. By the time your predicted ' (1, maybe 2 iterations away)' happens, batteries will have made 5 iterations.
The DoD for example is already sponsoring a massive program that companies lots of universities and national labs to work on Lithium Sulfur batteries that could double or triple the density of current Li batteries while also being quite a bit cheaper.
Silicon anode batteries are already in the early stages of commercialisation and they will make commercial aviation feasible.
And even if you insist on using chemical fuel, why would you use hydrogen? If you want to drive a truck a long distance at a time, you could just use dimethyl ether, methnol or something like that. That would solve tons of problem with storage and so on.
I really don't understand why people are so fascinated with hydrogen, while it continue to disappoint for 30 years. Even in the space industry, where fuel cell used to be used all the time there use has fallen out of favor.
What possibly could they have to offer for Toyota? It doesn't look like they did any work or even had anyone capable of researching hydrogen cells working for them.
Instead of advancing technology, they might have taken funding and credibility actual companies could have used.
The founder has so far answered just one real question on twitter, about what they were going to bring to the GM produced car:
"100% a badger. We will use common parts for example; tires, window regulators, hvac, brakes & batteries to drive down cost, but the badger is completely a badger. The infotainment, displays, software, ota, app, cab, interior, user experience, sales, service, warranty etc is ours"
That's a long way to say they'll use their software and sales team.
I don't see it as very different from Tesla, since when they started there was no real technology to talk about. The CEO of Tesla is also well known to be untrustworthy with his promises, having even being formally investigated by the SEC for stock price manipulation. I don't know the future, but there is a possibility that they will also develop the needed technology to make it all work.
I have met people like Nikola's CEO, and I bet my dear life that nothing will ever be delivered, except if the technology exists to completely - I mean exactly 100% - outsource it using the cash given by others and slap a logo on the result, failing in the end anyway. When you see a company so hell bent and putting so much effort in tricking investors AND actively avoiding doing any real work, you know what's happening. If you, and more importantly people with money to invest, are persuaded that "it's not different from Tesla", that's a victory for Nikola, and their sole source of income.
> since when they started there was no real technology to talk about
That is flat false, making a automotive battery out of laptop batteries was quite a technology development. They also made their own engines and inverters from the beginning.
> The CEO of Tesla is also well known to be untrustworthy with his promises
Actually the opposite, it is well known that when he says something its very likely going to happen. As most of the things he say, no matter how crazy to turn out to actually happen.
Arguable there is no other human alive in the world today, that when he say 'We are gone do X' that more people believe could actually do it.
> having even being formally investigated by the SEC for stock price manipulation.
He wasn't investigated for stock price manipulation, he was investigated for improper communication to stock holders.
> I don't know the future, but there is a possibility that they will also develop the needed technology to make it all work.
So even after 10 years of consistently laying every year, announcing dozens of technologies that all turn out to be totally fake you still think they can do it. That seems beyond utterly blue-eye to me.
Anyone else getting Theranos vibes? As others have stated here, Hindenburgresearch is a known short-seller and so has an self interest to drive down the stock price of Nikola.
I think you read the $2B upside down. Nikola paid GM $2B worth of stocks (11% of the company) to have GM manufacture its vehicles, not the other way around
> Hindenburgresearch is a known short-seller and so has an self interest to drive down the stock price of Nikola.
Short sellers don’t really have an interest to lie though. If it doesn’t look like there is really a fire, it’s much better to close the position and hunt for a new target rather than trying to make it seem like a problem when there isn’t. Lies don’t help short sellers because they present a legal risk and a financial risk (the market steam rolling them as they are seen through).
There is no rhyme or reason with GM. They’re completely incapable of innovating by themself in the electric or self driving space so they’re just throwing all their R&D budget into acquisitions and partnerships.
Started with Cruise, now Nikola, and it will continue until they’re bankrupt.
Absolutely. I also see the same FOMO dynamics at play. In Theranos' case a huge part of it was wanting to support "the female Steve Jobs". In Nikola's case it's not wanting to be left behind in auto tech while Tesla takes the lead.
The Theranos founder lived in a small apartment, while Trevor Milton built the biggest house in Utah.
Edit: Apparently what I said is incorrect about Theranos. I have heard this but I have never made a study of the company. So it might well not be correct or only for a limited time.
While not shocking given the previous track record of Trevor's previous enterprises - the most likely outcome here is that it will get very, very ugly. He also already 'cashed out' millions of dollars to buy a 32.5 million dollar ranch - one of the largest residential properties in Utah's history. [1]
Tesla's run up and general optimism around EVs seems to have triggered a gold rush of sorts, effecting other EV pureplays' stock prices (ex. NIO) regardless of progress and actual state of the technology.
While in theory I am in strong support of new financing models to bring new technologies to market(ex. these Special Purpose Acquisition Companies - SPACs) I am very concerned that if even a portion of the alleged is true, this could poison this financing route for legitimate businesses and the sector overall. A camp in the investment industry even think Tesla is a fraud, and this would only harm the narrative and long term mission of Tesla.
It would have been great if they actually took the money, utilized it with a plan and executed on the plan to help with electrification - the premise for which I think many retail investors have become involved.
Even if there was no fraud, I was always skeptical of their plan (smelled like vaporware to me) and their adamance about hydrogen as an energy storage medium without sufficient discussion on electrolyzer technology or how those unit economics work always struck me as big red flags. Seems like Nikola's plan was to combine a bunch of off the shelf parts existing from other sources into a product, in that case - where is the technology? So much of it with just the bit of digging and what I hear about it has made me skeptical.
Probably best to stay as far away as possible and see where the chips fall. I do wish them the best though, assuming there was no fraud.
>A camp in the investment industry even think Tesla is a fraud,
At this point in Tesla's history, how is it a fraud? It is manufacturing and selling cars. It is building batteries. I can see where some may think it is not living up to the hype/promise of returns, but they are actually making and selling product. Yet people are still claiming fraud?
I think this is a fundamental misunderstanding of what short sellers do (which is where most of the "fraud" accusation comes from). Some short sellers DO claim fraudulent behavior, e.g. Enron was famously predicted to be fraudulent by Jim Chanos.
However short selling at its core just involves the belief that a company is overvalued. In the case of extreme fraud, the "correct value" is $0. In most cases, the short seller just believes it's some amount less than the current share price (but above $0).
Tesla falls into the latter category. I'm sure some do claim fraudulent behavior, but Tesla is an interesting case because Tesla's PE is ~200 IIRC, compared to the 20 average for the automotive industry. For comparison, Amazon's PE is 120.
So if you think Tesla is ultimately a car company, or even just a "regular" tech company, it's not insane to think that it's incredibly overvalued. That doesn't mean you think it's a fraud, of course, but the subtlety obviously gets lost by many (and short sellers often make grandiose edicts that don't help their case).
Couldn't agree more that the sentiment doesn't make sense given what they have actually done, all of their proof, all their products, patents etc. (disclaimer: I'm long TSLA)
I'm just relaying what I have heard and read. Tesla's history is far from perfect. I think the target of issue has been their various claims and promises on 'self-driving' and their autonomous vehicle programs. Also, some possible issues surrounding the acquisition/merger of SolarCity.
And while the shorts around Tesla aren't making much noise right now given all the momentum, it wasn't all that long ago that there were some loud short sellers alleging about various accounting frauds. Some quick 'internet research' here will dig up various allegations and statements from the 'haters'.
More common at issue is that many traditional auto analysts' existing equity valuation models for auto companies 'break' when you plug in the numbers for Tesla - making it impossible to come to a 'reasonable' valuation they are comfortable buying at (as these are people investing other people's money need to be able to point to something that justifies the purchase if it goes south).
> While in theory I am in strong support of new financing models to bring new technologies to market(ex. these Special Purpose Acquisition Companies - SPACs) I am very concerned that if even a portion of the alleged is true, this could poison this financing route for legitimate businesses and the sector overall.
SPACs have been around for a long time, and they've always had a bad reputation, often used for various forms of fraud and penny stock scams. Going live via a SPAC is opaque and expensive; you'd never choose it unless the normal IPO path seemed too risky for some reason, probably because you might not be able to survive the transparency the process requires.
If Nikola is just a complete fraud, that wouldn't taint SPACs so much as it would confirm their existing reputation.
Combining existing off the shelf components into a novel design is a legitimate way to build an innovative product. The first Tesla Roadster was exactly that, all car companies had access to the technology but they dismissed it as a gimmick, who would buy a street car powered by lawn mower tech.
> "The entire infotainment system is a HTML 5 super computer," Milton said. "That's the standard language for computer programmers around the world, so using it let's us build our own chips. And HTML 5 is very secure. Every component is linked on the data network, all speaking the same language. It's not a bunch of separate systems that somehow still manage to communicate."
This guy does not know what HTML is. What he has described is not what HTML would be used for.
And I'm supposed to believe he's some sort of mastermind behind some new age hydrogen/electric truck?
Have you listened to Jack Ma talk? He sounds like some kind of total moron in the panel discussion with Elon Musk. I know, you're thinking "It's not his first language. That's what it is" but go watch it yourself¹. The ideas he expresses seem completely unformed and make it look like he's not operating at a particularly high level.
But Alibaba is real. It's a real company doing real things and delivering real value. It's a giant success.
Now I'm not saying Nikola will be (maybe those shorts for 2022 are pretty cheap) but people speak like complete idiots and still run successful companies that they start.
Yeah, if a CEO/director being a chronic bullshit artist always meant a company was fraudulent, I'm not sure how many legitimate companies we'd have left.
The only difference between Jack Ma and Elon in that interview is that Elon's bullshit sounds smart to us and Jack's doesn't. Every CEO's real job is to pander to their audience and hype up the company. That might mean repeating "HTML5 AI Encryption Blockchain" over and over again to roomfuls of investors and shareholders.
Yeah, after that talk I was pretty skeptical Jack Ma was anything more than just a CCP figurehead or maybe friends with someone in the government?
He comes across as a complete idiot.
Maybe you don't need to be that smart to run a company like Alibaba, but I find that hard to believe - I suspect government protection and party favoritism plays a part.
"More impressive is that Nikola’s revenue for the second quarter was very small ('immaterial,' Nikola actually calls it), just $36,000. Most impressive, though, is how they earned that revenue:
'During the three months ended June 30, 2020 and 2019 the Company recorded solar revenues of $0.03 million and $0.04 million, respectively, for the provision of solar installation services to the Executive Chairman, which are billed on time and materials basis. During the six months ended June 30, 2020 and 2019 the Company recorded solar revenues of $0.08 million and $0.06 million, respectively, for the provision of solar installation services to the Executive Chairman. As of June 30, 2020 and December 31, 2019, the Company had $3 thousand and $51 thousand, respectively, outstanding in accounts receivable related to solar installation services. The outstanding balance was paid subsequent to period end.'
'Solar installation projects are not related to our primary operations and are expected to be discontinued,' says Nikola, but I guess they are doing one last job, specifically installing solar panels at founder and executive chairman Trevor Milton’s house? It is a $13 billion company whose only business so far is doing odd jobs around its founder’s house."
The bigger issue here is that this man was able to convince "industry veterans" to give him massive amounts of money. You can see through him in a heart beat because you're technically savvy. Clearly the people running these automakers are not.
It doesn't surprise me in the slightest why he was able to convince deep pocketed "industry veterans" to fund him, and actually understanding the social dynamics at play is important for understanding society at large (and can be very helpful when it comes to making money).
There is a metric shit ton of pressure on these legacy automakers to compete with Tesla. Sure, you may think Tesla is a relatively small slice now, but the leaders at these companies are extremely scared of falling behind technologically to the point where they are uncompetitive. I'm quite sure a lot of people at GM were skeptical, but I bet a lot of them also did the subconscious calculation "What's worse for my career, losing out on a deal with an innovator like Nikola and falling even further behind, or going with Nikola, in which case if it fails we're not much worse off then we were originally?" Against this backdrop it's easy to see how a scammer can take advantage of this dynamic and even play legacy players off each other, e.g. "Well, you could choose not to invest in us, but then think how much further behind Tesla you'll be. And you know we're talking to Ford, too."
Seriously just watch any of the guys rants on YouTube, you don't have to be technically savvy to see through his bullshit. Watch any of his interviews on YouTube. I like this one with Jim Cramer trying to nail him down on his pre-sales number on the Badger and laughing at him later
There might not be many options for investors that want exposure to the EV market but missed the boat on Tesla. I'm sure plenty thought it could be the Lyft to Tesla's Uber.
It will really only fail when the money dries up. As long as they can keep raising money, they can keep the fantasy alive long enough to lure in other investors.
Musk states that his company's intention is to advance computer vision to the point where it can safely drive a car, and then offer this technology with the sensors deployed in their current vehicle fleet.
Milton stated that using a very secure HTML5 supercomputer that's linked on the data network allows them to build their own chips.
These statements are not equivalent in what they imply about the speaker. It's not subtle.
You can watch that talk and see the approach they're taking. Maybe you're more skeptical than they are about the near term possibility, but you can see that the work and progress is real.
The AGI risk is real too.
What Milton said doesn't make semantic sense, it's not a question of timelines.
I got the HW3 hardware update in my MX a few weeks ago - and from what my car has demonstrated to me what it’s capable of - I sincerely believe Tesla will have driveway-to-driveway autonomy for simpler scenarios (e.g. suburbia and semi-rural areas, with clear road-markings) within two years.
I appreciate that what I just said comes with a huge caveat - and that probably 80% of the work will be hammering-down everything else - but consider that Google’s Waymo is already well-past that already.
> And yet every Tesla owner tells me that their car is just one update away from driving itself across the country.
I just drove my Tesla half way across the country and back last week. And based on the performance of Autosteer and the neighboring car visualizations they're nowhere close to Level 5 self driving.
Love the car and am a big Tesla/SpaceX fanboy. But I won't believe it'll achieve Level 5 until I see it.
They're pursuing a patent for that, so he was reluctant to talk about it. The blockchains are embedded into HTML tags using proprietary, secure data attributes. It's hash encrypted using CSS3, which is the standard algorithmic formulation language used by all programmers to control how data is shared.
"At our new hospital, we're using stethoscopes," he said. "That's an industry-standard tool for doctors around the world. Because of that, we can perform advanced procedures, like hemorrhoidectomy and brain transplant."
I've known plenty of manager types that have a very little understanding of the technology involved with their product. A lot of times they try to parrot what their technical team is telling them. Some can be very good at it, other sound like idiots because they have little true understanding of the technology. But that's okay, since their true expertise is in putting together a company or organization that outputs a successful product. It requires being able to manage and inspire people to get the best from them. And countless other parts that I can't even imagine. It does not require a CEO to get too deep in the weeds of the technology. A CEO does not have to know everything, he just has to hire and manage the people that will do the parts he doesn't know. Technology has very little to do with that but expertise on how people work and function has everything to do with it.
BTW, they sound like idiots to the people that understand the technology but that's a small subset of all people. Most people have even less understanding than the CEO. So they get influence by his charm and finesse. What most people would call BS around here.
Most people do not really know how HTML works, and nobody but technical people should really.
Or at least - they could make major mistakes in communication.
If he was 'my CEO' I would understand that he was trying to say 'Infotainment is a platform, built on extensible tech that everyone knows how to use' - this is fair.
It seems like Nikola is a fraud, but this isn't the red flag actually. This is standard miscommunication.
I agree this could be easily understood as a result of some internal talks where they switched platforms and he got a report saying "We don't need to rewrite the infotainment system, it's mostly HTML5, so we're all good even after we switched from X to the customised ARM foo". It's still stupid, but doesn't mean he's actively lying here.
I'm not convinced thats fraud but probably just "CEO bullshitter who only speaks in buzzwords in public" (referring to the interview). I also don't think anyone at GM (through whatever technical diligence they hopefully did) didn't bank on HTML5 as a chip-enablement strategy.
Wow that is just complete gibberish. I haven’t been plugged into these incidents and didn’t realize there were such issues. Is this an indictment of news media? I feel like I’ve mostly been fed vague but confidently positive news bites before this discussion.
It's hard for me to wrap my head around time. Over 20 years ago the CxO of Sun came to one of the big automotive events and said a car is just a browser on wheels. I think he was selling coffee. Er Java? Been too long.
You think he's a fraud simply because he bullshitted his way through some computer sales pitch? In a way, I have a ton of respect for people willing to even try this kind of thing in public
If he could talk lucidly about things like HTML I'd think that lent more credence to the possibility he didn't have a clue about hydrogen
edit: for the downvoters, if you haven't seen one of these "bear thesis" articles before, understand you must do at least as much homework as the bear claims to have done before accepting anything you read. Of course Nikola is a dodgy company, but it's also a social phenomenon. That's the value in it for the likes of GM, and also for the average investor -- including the professionals. At one stage YouTube was the largest video piracy company on the planet before a larger company swallowed them up and cut deals to legitimize what they'd done. Meanwhile, everyone knew the brand. You can consider what's happening here to be something roughly comparable
Fair enough. But what kind of person lies about the existence of solar panels on their roof?
> Trevor claimed that Nikola’s headquarters has 3.5 megawatts of solar panels on its roof producing energy. Aerial photos of the roof and later media reports show that the supposed panels don’t exist.
They pulled a truck up a hill and let it roll down unpowered, using it in a video demonstrating their new EV technology when nothing worked. Who does that.
This would be Google creating a static page of results and pretending they had crawled the data when they demo’d submitting a query.
Uber manually arranging a driver / passenger pick up and animating a vehicle on the map along a predefined route, etc. etc.
It’s edgy to say startups do this, but there hasn’t been a startup conducting this level of fraud so openly since Theranos. And Nikola is a publicly traded company valued at billions.
this sounds equivalent to recording your demo of your website to play during a conference because you aren’t sure it’s gonna work on stage. done that plenty of times
There’s a difference between Nikola’s repeated product announcements that haven’t led to actual products, versus rigging a demo of the half-working alpha version and then shipping the real thing shortly after.
How crap do you have to be that, if you're going to fake it, you don't just tow it and digitally remove the cable or put an electric motor in or whatever? It's just a such laughable approach.
Read the article. It discusses how they tested with the same road, and were able to put an SUV in neutral and achieve a cruising speed of 53mph using that same road.
Am I the only one who reads these stories of high level fraud (this one and Theranos) and think: “why not me?” I’d like to say I have higher ethical standards, but these conmen have cashed out a loooot of money doing this, and I think my ethics would also get flexible as dollar amounts get into the 8 or 9-figures. But then I realize, this type of a person has been doing this their whole life. This guy bilked his partner out of $50k in selling a $300k business. I just wouldn’t think it’s worth the hassle to lie through my teeth to everyone around me for $50k. That’s the difference between us and them, I guess, it’s the small-time fraud you have to slog through to make it to the big-leagues of scams.
I think one place where Abrahamic religions steered us wrong ethically is a philosophy that being a good person is a lot of work and being an evil person is easy.
When I look around, it seems more the case that being a better person or a worse person both take a lot of work. "Chaotic neutral" is probably cake by comparison.
If you want to be a billionaire you have to practice, practice practice taking more than your share, and some days that'll count for a percentage of your goal. Or put more simply, it's not about the $50k, it's about the muscle memory.
You'll risk jail. And never having an honest job again. And having to hang out with the sort of people who enjoy the company of con artists. And lying through your teeth all day. And actively spending your creative energies making the world worse. And deliberately stealing money from people who might have used it for something useful. And gaining the lifetime hatred of these people. Who will want to punish you personally, financially or even commit acts of violence against you.
If you've really thought through it and still figure it's a good idea, I'd honestly like to stay as far away from you as possible. Because I'm pretty sure that would represent a judgement that's at best very unsound, and in the more likely case indicates a personality that's dangerous to their surroundings.
There are many would be con artists that have not gone further than counting cards at the local tribal casino. I would argue these men are equally unethical but success at this scale requires persistence, hard work and talent. In this case, the talent is lying convincingly.
> ...it’s the small-time fraud you have to slog through to make it to the big-leagues of scams.
Not just that. It is still a very, very big world to ply their scams upon. While it has gotten a little better with the Net, there is still plenty of room to work with.
There are still tradespeople that still rack up a pile of pissed-off clients and lawsuits, then walk away to another province/state.
How many utterly toxic managers have you worked with that completely trashed a department to glorify themselves, collect the big bonus check in Year 3, then walked off to the next company before the entire rickety house of cards comes crashing down? Until business culture attitudes change on short-tenures, swapping long-term stability for short-term gain remains the easiest scam to run for easy gains.
How many minus-X engineers have you worked with who were extremely good at socializing with management, held up process and procedure as a shield to ward away anyone from asking them to do anything, then pushed to the front of the crowd when a delivery milestone is achieved?
How many products and services outside of your area of expertise have really good marketing, even good "reviews", but upon actual real world use are complete wrecks, or have critical defects that sit unaddressed for years or even decades? Our socio-political-economic system is extremely good at broadcasting the availability of goods and services at light speed, but we're still stuck in the Bronze Age of speaking individually with each other in the market bazaar literally word of mouth to find out the worth of those economic transactions.
There is an entire industry thriving within Amazon's ecosystem doing exactly this, drop shipping from China factories spewing schlock that only marginally works long enough to prevent monetary clawbacks. Personally, there is an entire product category I've tried 7 different vendors all with great Amazon ratings where every single unit has failed within six months of use: Lightning audio splitters (you can split a Lightning port into either two Lightning ports, or a standard mini audio jack and a Lightning port, typically to plug in a headset and keep an iDevice powered at the same time...like needed for regular marathon web conferences where Bluetooth headsets don't last long enough). I made a Franken-dongle comprised of an Apple-branded Lightning-to-HDMI converter, HDMI audio extractor to RCA audio plugs, and RCA audio plugs to female mini jack audio plug to work around this.
It takes a large amount of effort to find reasonable comparisons between products and even then, many manufacturers change up quality when they "reach the top" and want to cash out on "winning" the quality-value race. Todd at Project Farm exemplifies the absurd amount of work it takes to compare pedestrian tools and supplies. The many, many posts in neighborhood chat groups/forums asking for recommendations for a good electrician, HVAC, plumber, dentist, etc. exemplify the general failure to set up non-gamed, non-compromised review systems integrated into the economic system.
And illustrate the general failure of capitalist transactions as we know them today to convey granular merchant-to-customer information like say, a market butcher with a cook: the transactions lossy-compress away all the time-bound and quality-bound attributes of the transaction itself into a single number, and then lossy-compress away again that single number into a multitude of streams of numbers (revenue/income/profit/loss) inaccessible to customers except for the largest publicly-traded entities at the grossest levels, and then lossy-compress away on top of that with credit availability to mask and obfuscate real-time effects. Customers are left with a huge latency between actual supplied quality in real-time to rough reputational "feel" from aggregated opinions over a long period of time.
Fraud is not a bug of such a system, it is a vital operating feature for far too many economic actors.
"Hindenburg Research" is already an excellent name for a short seller, but in this case, they are short selling a company creating cars powered by hydrogen fuel cells. 2020 continues to be an incredibly on-the-nose year.
> Initial Disclosure: After extensive research, we have taken a short position in shares of Nikola Corp.
This is a great example of why shorts are socially valuable. Without that incentive who would go to the trouble of doing all this research to uncover (possible) fraud? This topic that comes up a lot on Money Stuff, where its easier for private companies to hide misbehavior because you can only short the public ones.
Short sellers, especially public ones, have a critical role in our equity markets. They remind me of defense attorneys. It's a sometimes thankless job and nobody likes you for being too good at it, but it is absolutely vital to keep the system healthy. Kudos to these guys for doing the fucking work.
I liked the bit where someone rented a car out in the middle of the desert and rolled it down a low grade hill for several miles to prove the truck demo was unpowered.
I have been watching Nikola for years wondering why anyone believes its BS, I didn't realize the deception was this blatant and deep, I guess like many I didn't do real due diligence, but I didn't invest millions in the company either.
Very sad and disheartening to see it continue and get further investment, just make me think that telling the truth does't pay, selling lies does, fake it till you make it taken to the extreme, similar to Tharanos.
The over promise under deliver approach Musk uses annoy's me but there is something real there, real results, Nikloa is literally riding on a play of a name of another company. At least Musk recognizes the issues with Hydrogen and he obviously has a grasp of the technical issues:
It took me years and years to get a story that made sense about Corbin Motors and why they flamed out making the Sparrow and trying to bring out the Merlin.
It will probably surprise nobody here that the Pareto Principle applies to large scale manufacturing. Hand building a vehicle is 10% of the work, and the other 90% is a very different kind of work and skillset that is easy to drown in. A bunch of things you just figured out how to do well, you need to stop doing entirely because a machine or a vendor should be doing them for you. Along with all the people and equipment you acquired to do it.
You have to stomach writing off a bunch of equipment, swallowing your pride and taking advice from people who have no sweat equity in your company. And as a cherry on top, you probably get to be the asshole that has to fire John Henry, who has been here since before the machines.
Nikola’s Director of Hydrogen Production/Infrastructure Is Trevor Milton’s Little Brother, Who Worked Paving Driveways in Hawaii Prior To Joining at Nikola
Nikola’s Chief Engineer: A Background Largely in Software Development and Pinball Machine Repair
I was wondering, how on earth this company even came to be listed on NASDAQ, since they have no products and no revenue.
So I looked it up and basically it looks like they acquired a company which was ALREADY listed on NASDAQ then renamed it.
> In March 2020, Nikola announced its plans to merge with VectoIQ[10] Acquisition Corporation[11] (ticker VTIQ), a publicly traded special purpose acquisition company run by former General Motors Co. executive Steve Girsky. This resulted in the combined company being listed on the NASDAQ exchange with the NKLA ticker symbol.[12] Nikola’s stock began trading on June 4, 2020, a day after the merger was completed
>So I looked it up and basically it looks like they acquired a company which was ALREADY listed on NASDAQ then renamed it
Not just any company, a Spac. Special purpose acquisition company. That's their purpose, they're not actually companies, but blank check investment vehicles.
It's a way to go public without an IPO. And unlike reverse mergers with actual companies spacs are clean since they're shell companies.
Reverse Takeovers (RTOs) are super-common in Australia. A lot of broken mining companies whose exploration came up blank wind up sitting around still with a symbol on the ASX. This is used as an easy way to list - although the prognosis is not normally good (i.e. anyone evading the scrutiny of a listing starts a bit behind the 8-ball). Given how expensive and complex listing is, it's not the worst thing in the world.
this is interesting. i worked for someone like this who was CEO of a YC backed startup. everything was “in progress” but really hadn’t started. the stuff that was “finished” was ongoing or never happened. it got to the point where every line in a meeting about plans i had to question to find the real story. you can get very far bullshitting your way
I think it’s a bit funny how some discussion in this thread has veered into denigrating Musk — who is at times one of the ten richest people in the entire world, and who ships products that millions of people have bought or aspire to purchasing, and who is predominately responsible for ushering in this entire era of the electronic car.
Don’t forget that “Hindenburg Research” (seriously?!) stands to make many tens or hundreds of millions of dollars based on whether they can convince a significant number of shareholders that what they are claiming is true. And also that if they are successful in doing so that it also becomes a self-fulfilling prophecy.
I have no reason to believe or disbelieve any claims being made in TFA, so the only thing I can say for sure is that that this “report” is in no way altruistic.
One of the very precarious notions around short selling is the financial incentive it provides to ruinously slander a company, and the very meager legal protections a company has against defamatory claims that short sellers make — in the name of “analysis” — against a company that they stand to make a fortune from if it fails.
Without knowing anything one way or another about Nikola, the only thing I can say for certain is that if Nikola misstates a material fact to investors they can go to jail, whereas if “Hindenburg” gets their facts entirely wrong they face no repercussions. They have no duty to the shareholders of Nikola stock, and the legal peril of being even willfully wrong in their analysis is minuscule compared to what Nikola officers could face from the SEC.
That’s just the grain of salt I would carefully consider before reading anything that Hindenburg puts out.
The group releasing the report stands to lose their position if their claims are false or even if the market ignores them. I’d argue it’s a lot harder to convince a bunch of people with long positions making the market that they pumped the wrong company than it is for the makers to ignore the ruse long enough to diversify the inevitable failure and pass it into your retirement fund.
You don't just short companies for fun with no ramifications. I think you’re painting an exaggerated picture of the nature of taking down a company. You only attempt to do so if you are extremely sure of your convictions and have overwhelming evidence to support your case. You make enemies and you risk losing your connection to other market makers.
I came across Nikola last month and didn’t need a report like this to smell something fishy. But this one is especially damning. I see no reason to not believe the evidence in the report.
Not long on Nikola, and like I said, I am not making any judgement on the facts or evidence presented whatsoever.
But I was long Tesla during a similar period in their own existence, while short sellers tried to make a similar case that Tesla was a fraud and certain to go bankrupt any day.
There is always a strong reason to question a report when the authors have an extremely vested interest in people believing it, and in fact when the objective truth of whether they are right is less important than how many people they can make believe that they are right.
Yes, "Hindenburg" is a bit on the nose, and they own up to it on their "About" page[0]:
>We view the Hindenburg as the epitome of a totally man-made, totally avoidable disaster. Almost 100 people were loaded onto a balloon filled with the most flammable element in the universe. This was despite dozens of earlier hydrogen-based aircraft meeting with similar fates. Nonetheless, the operators of the Hindenburg forged ahead, adopting the oft-cited Wall Street maxim of “this time is different”.
>We look for similar man-made disasters floating around in the market and aim to shed light on them before they lure in more unsuspecting victims.
Looking at this piece I feel like Mark Baum when he met Greg Lippman (changed to Jared Vennett in "The Big Short"): They are "so transparent in [their] self-interest, I kind of respect them."
The fact that big companies and Big CEO's are stupid and incompetent is the interesting thing.
Everyone who worked on this deal at GM should be fired along with the CEO.
I once worked at a 'Big Company' that thought about buying n Mp3 player. Everyone loved their CEO, their pitch, the box, product looked slick.
We were going to buy it. I took it home and tried it and it was garbage.
Literally our M&A team, execs, due diligence and nobody bothered to fing try the dam product* and use a little bit of common sense to ascertain whether it was 'quality' or not.
This was not fraud, and of a much smaller scale, but it's just incredible how big the 'blind spot' so many executives have.
Edit: I said executives were 'stupid' they generally are not. They just have gaping holes in their abilities, that enough ego doesn't allow them to even see themselves. It's understandable they don't want to look weak, but insane that they don't do background/deep checks.
If I were a CEO I would include 'product & IP validation' right up front as part of due diligence - not just by 'accredited people' (because you can't get a 'CA' in tech) but by people you trust.
Edit 2:
"Trevor has appointed his brother, Travis, as “Director of Hydrogen Production/Infrastructure” to oversee this critical part of the business. Travis’s prior experience looks to have largely consisted of pouring concrete driveways and doing subcontractor work on home renovations in Hawaii."
Oh please make this into a Tiger King Netflix special ...
Totally reminds me of Theranos. "Charismatic" (I put that in quotes because they're only charismatic to a certain group of people, I think the more "mechanical" thinkers like myself view them about as charismatic as a used-car salesman) founder who the industry touts as "the next Jobs/Musk" excels at sounding like a ton of bullshit but is able to convince well-heeled investors to pony up a lot of money due to FOMO.
Does anyone have a contrary spurce of positive evidence that Nikola honestly does have valuable working technology? I have not made any effort to dig, but what little I had seen of Nikola so far seemed more hype than substance so the accusations here seem pretty believable.
The most charitable thing I've seen is some of the videos that came from when Trevor invited several popular Tesla oriented YouTube and Twitter personalities to Nikola HQ for a day long tour and Q&A. Sean Mitchell in particular has a pretty even handed take.
I’m not big on trading individual stocks, but I own a bunch of long puts on Nikola. I don’t know any other company that seems as likely to go to zero (other than companies like Hertz, where everyone knows so the options are priced appropriately).
Be careful with those puts. It’s entirely possible to be right and still not be able to close out your position because the underlying is halted/delisted.
The market can stay irrational longer than you can stay solvent
I think the flood of retail investors with disposable income and government benefits is leading to absurdities in market pricing. See: Hertz skyrocketing after announcing bankruptcies.
After all, the stock has dropped 90%, how much lower can it go right?
Halts are temporary (generally a few hours to a few days). If it's delisted from NASDAQ it will almost certainly move to another exchange (OTC / pink sheets) and the stock will still trade.
If the stock truly is wiped out and common shareholders equity is 0, you can exercise the put, receive 100x the strike value per contract, and deliver nothing.
Yeah, I'm pretty confident Nikola is a total fraud that will go to zero but it's still hard to make money even knowing that.
How long will the fraud last? Isn't your return limited by the difference available under the put?
I generally stick to calls because it's way easier to make money in a company you know is good and it's easier to capture the upside (Peloton for me recently).
Market seems skewed this way, it's a lot harder to correct the price even when you know it's total bullshit. Seems likely to allow frauds to go on longer.
The sad part for me is that this reads like a profile of a "successful, new age, startup entrepreneur" relying on the 'fake it till you make it' mantra betting other people's money on the outside chance they can figure out how to do what they claim they already do before everyone else catches on.
I would have expected that GM's due diligence team would uncover this sort of stuff prior to taking an 11% position in the company.
Which proves to me, once again, that the way to get rich is to defraud people with a lot of money, and not a lot of insight.
In fairness, GM got $2 billion worth of Nikolai stock for future vague work.
The work they are supposed to be doing for Nikolai is the same work they'll be doing for their own EV trucks (that they'll have to have at some point) so you can look at it as GM being paid by Nikolai for R&D.
I would still not do this deal if I was GM.
The probability of Nikolai bursting in the flames of disgrace and litigation before they'll pay GM for anything is 99%.
GM can only sell 30% of stock after a 1 year (and additional 30% each year after) so by the time they can cash in, it'll likely be worthless.
And Mary Barra will have to explain how she got taken by an obvious fraud. It might end up costing her a job.
> I would have expected that GM's due diligence team would uncover this sort of stuff prior to taking an 11% position in the company.
It's GM, so it wouldn't shock me. But as others have pointed out, the deal isn't quite as bad as it sounds.
> relying on the 'fake it till you make it' mantra betting other people's money on the outside chance they can figure out how to do what they claim they already do before everyone else catches on.
This really does seem like the de facto path to unicorn status. SoftBank and WeWork, Theranos. I would also throw in the soon-to-IPO Palantir and Snowflake. Both seem to be held in the air on pure hype on incredibly lackluster fundamentals. Uber is a decade old now and no one knows their end game. They seem to either be holding out for all taxi services to die off so they can start fleecing their customers, or on pie-in-the-sky hopes of a self-driving fleet of vehicles (owned and insured by who, I wonder?) I personally don't see anything "free market" about these obvious market manipulations via heavy subsidies. This sort of winner-take-all behavior will likely hurt consumers and choice in the long run.
But back to your main point, this is just the Minimum Viable Product nonsense taken to its logical extreme. How often have you seen the advice to just toss together a demo, fake website, or whatever and collect email addresses and/or get customers paying real money upfront for a product that is pure vaporware? It's the very first thing people tell you to do to verify a market. I have yet to see a startup that wasn't a little bullshit. Perception is reality today. That's what all these "fake it til you make it", "move fast, break things" type of people remind you, relentlessly.
GM likely knows this. They didn't buy 11% in the company. If you actually read the agreement its basically Nikola buys lots and lots and lots of stuff from GM and they pay part of that with that stock, but they also have to pay significantly in cash as well.
GM also would retain the right to all the fuel credits and those could be valuable.
If Nikola is successful, GM profits with a great deal. If its not GM doesn't actually lose much. only the time it engineers spent on cooperation with Nikola and potentially some tooling cost.
And they're short selling this position because they have good reason to believe the stock price is severely overinflated due to fraud. If what they're saying is true (and they provide lots of evidence) then this company is basically worthless.
Short sellers take positions because they believe stocks are overvalued, at least in the short term, and at least can be made to look that way with sufficient negative marketing. When they share their market research with lots of adjectives, but oddly do not share any of the positives that a company may possess (and why would they?), then any investor acting on that one sided information has possibly done himself a significant financial disservice.
Initial Disclosure: After extensive research, we have taken a short position in shares of Nikola Corp. This report represents our opinion, and we encourage every reader to do their own due diligence. Please see our full disclaimer at the bottom of the report.
This is within 5 minutes of reading so I don't know where you got the 'end of the article' from.
(I read the report this morning so they didn't added it after ward.)
It’s before a zillion background addendums, so not quite at the end think but it would be fairer to do so a lot earlier.
Reason? I think most readers would stop reading this (IMO) badly written and badly formatted avalanche of statements (which may or may not be true, but the form in which it is presented doesn’t give me confidence that it is) before hitting that info.
As is sometimes noted, the Hindenburg is known as a gigantic disaster, but only a little over a third of the people on it died, which is probably better than you usually get from an airplane that explodes in a fireball at 600 feet.
So maybe they are looking for companies that are going to have extreme PR disasters, regardless of actual consequences.
They're looking for companies that are fatally flawed but present otherwise. Kind of like the Hindenburg.
Hedge funds are not usually terribly concerned with marketing image. See, for example, Cerberus Capital Management, the former owner of Chrysler, which saw fit to name itself after a three-headed dog that guards the gates of Hell.
Same reason I cringe when people use “as per” where a single “as” or “per” will do (per means as), “thusly” instead of “thus”, and, my personal anti-favorite, “individual” to mean “person”.
It’s a special kind of pretentious language that people use to make them seem more authoritative or accurate/deliberate. It’s manipulative.
It's the same for me when someone says, or writes, "as of late" instead of "lately". Sometimes people think that more words make their writing more professional, but it's usually the opposite. Sentences that are more polished and concise are the hallmark of professional writers.
>On the morning of September 8, 2020, Nikola announced a strategic manufacturing partnership with General Motors, sending shares of both companies sharply higher.
Interesting that GM seems to be making a lot of moves at once.
I know Hyundai Motor started shipping production model of fuel-cell truck in July 2020. They are planning to ship 1,600 hydrogen-powered Xcient trucks to customers by 2025.
Trevor Milton, founder of Nikola Corp, said he would like to cooperate with Hyundai. He said he had twice made proposals to Hyundai that were rejected.
They said that they would release a report on a well known company but this is a little disappointing. I think everyone knew that Nikola was pretty shady to begin with. After all, it’s not everyday when the company sells merch that revolves around their trading symbol
So it seems GM didn't really give any money to Nikola ? The article mentions they get 2 billion equivalent in stocks for non-cash contributions and 700 million in reimbursements from Nikola.
Nikola seems to be little more than an idea but this report won't sink their ship. The reality is that the world is looking for the replacement for our carbon based energy system. Even if he just comes close to making a dent he and the people around him will be well rewarded. Everything starts with a dream, he seems to be a bit farther along than that. I won't invest but the car companies should at least help him make his dream come true. It will benefit all of us.
For those who have read “Bad Blood”, which details the fraud and unethical practices behind Theranos, this deeply comprehensive account of Nikola feels like deja Vu. I wonder if the same power dynamics are in play here as well, making the truth hard to recover from those close to it while an incompetent news industry continues primarily writing positive headlines that enable the fraud.
Check this one: “ elaborate ruse—Nikola had the truck towed to the top of a hill on a remote stretch of road and simply filmed it rolling down the hill.”
Because Nikola has been excellent at selling their story to a broad set of people using social media and youtube. And many of these don't follow reports like this, plus the anti-short backlash from the hardcore fans and investors is strong with reports like this.
They are 'the next Tesla' but 'better' because they use 'hydrogen'. And every 'blogboy' knows that hydrogen is the real technology of the future. So when a untypical CEO from a Tesla like company makes big claims and has amazing presentation and videos to back it up, many buy it.
Nikola did clever things like suing Tesla over their truck design, to get massive exposure threw the Tesla hype machine with the moto bad publicity is publicity. They consistently try to get into all the Tesla and EV influences and made it a point of trying to get them onboard. Trever Milon often competing on Tesla, comparing themselves to Tesla and so on.
He literally says things like 'There are few people who can out-Elon Elon but I'm one of them'. That sort of talk sells well.
Nikola for 4 years consistently trying to insert itself into the conversation and that has really payed of for them. They have never done anything but get mentioned right along companies established car makers. In reality Nikola is far less of a company then Rivian, but much better known.
> Trevor has appointed his brother, Travis, as “Director of Hydrogen Production/Infrastructure” to oversee this critical part of the business. Travis’s prior experience looks to have largely consisted of pouring concrete driveways and doing subcontractor work on home renovations in Hawaii.
I totally agree here. Following this space for a long time, Nikola has always been by far the shadiest of all these companies.
They were one of the very few companies that claimed revolutionary battery technology. This is an instant red flag and a huge one. New revolutionary batteries don't just just happen.
Sila Nanotechnology, is only replacing anode materials, and they have been at it since 2012 and don't expect to be in cars until 2025. Quantum Scape, who want to make Solid State Li Anode batteries is not gone be in cars until 2025.
There were a number of other companies who also did this 'we have revolutionary batteries'. Some actually believed they did. Dyson is a good example, they wanted to create a car, and to achieve their targets, they invested lots of money including in batteries. However since they are a honest company they eventually admired that they couldn't hit their engineering targets and abandoned the project.
A Nikola competitor in the arena of bullshit spinning is Henry Fisker. His first company made lots of nonsense claims, including about batteries, but unlike Nikola they actually went threw the trouble and made some investment in future battery tech, just not credibly commercial ones. They went bankrupt. His new company is right back to the old bullshit spinning way but they have lower their ambitions and just open say they want to buy the VM MEB platform, now they are gone be the most 'sustainable' among other claims.
As a comparison, Tesla 'revolutionary' technology at battery day will likely not be a silicon anode or a lithium anode, those are simply not ready for commercial use. Revolutionary battery technology would be 10-20% energy density improvment and 30-50% longer lifetime maybe 2x faster production speed, and Tesla has been working on this for 5-10 years and have spent many 100s of millions acquiring a set of companies and having research agreement with multiple universities that all work in collaboration. In total I would guess to really bring a new cell to market at scale, you are talking 5-15 years and 5 billion $, and that is still with basically conventional cell chemistry.
Much of the same can be said about Fuel Cells. Toyota, Honda and also the Koreans have been banging their head against the fuel cell wall for 30 years, with heaps of government money to back them up. They know they can't make it work, even with their massive resources. In personal vehicles they are not competitive against EVs in the slights (while also not being an improvement in CO2 compared to Gas) while in trucks they are not competitive with Disel or Natural Gas, and soon electric trucks are gone take the majority of routes over as nobody can compete with their price on these short and mid distant routes.
But Nikola are gone make it, and not for a geographically small place like Japan, but for the gigantic US without much government support either.
Another topic is that of product announcements. If you follow Nikola for many years, or you go back to 2016 and look at their announcements there is a funny effect that happens. People can say about Elon Time what they like, but mostly the products actually do come out and often are improved over the original announcement in a number of ways. Nikola shows the exact opposite pattern. It goes something like this, announce revolutionary new product but its 3-5 years out. Then progressively lower the specs over time, while pushing the time to market out further.
The hype for anything EV related has been insane. Quantum Scape is a fine company for example, but they have valuation that is insane for a company that is not gone make real money for many years and not gone make profits for many more after that. They essentially have a technology that requires a totally new manufacturing system, while competitors like Sila can put their materials in existing facilities claim the same level of improvements. I wouldn't expose myself to a unique technology with so much competition
There are tons of EV startups and they differ widely from Lucid, Rivian being serious companies step by step putting in place a solid car company. Dynamic companies like NIO coming out of China. And there are the bottom feeders like Nikola, Fisker and others that surf on the hype.
This is gone be a massive market shakeout with Tesla being the leader hunted by everybody. Slow moving giants like VW, Toyota and so on finally realizing whats happening and taking methodical step after step. And a massive wave of startups from around the world, especially China trying to be next next big thing. Its gone be interesting to say the least.
It's my opinion that GM felt forced to enter into this partnership with Nikola because Ford was able to get into bed with Rivian when GM pulled out of that deal. For GM's sake, I hope that these guys are completely wrong.
It's more of a reputation hit than anything. If this turns out to be as bad as these short sellers are saying, then anybody who really associated with Nikola is going to look really bad in the eyes of consumers.
Bigger shocker here. I hope Rivian doesn't follow the same path, but I can't seem to find any real videos of their truck doing what they've been saying it's capable of either.
Where in that video does the truck go from 0-60 in 3 seconds, travel 400+ miles on a charge, charge in a reasonable time frame, etc...?
This is a marketing video. For all we know that truck could have an engine. I'm talking about a real actual video of the truck doing what it's been proclaimed to do. It's been a few years, it shouldn't be so hard to have a single video of a truck getting close to these targets.
How do we tell that this research has 'teeth'? Sounds super juicy if true! Would there be a 'ticket number' of some kind for an SEC complaint that Hindenburg filed?
Reminds me of the GE hit piece appearing on gefraud.com that tanked the stock and is now nowhere to be seen. Nor is the guy that authored it. I’m sure they made out like a bandit on their options.
There seems to be such negativity surrounding electric vehicles in the media.
I wonder if there’s a vested interest deliberately trying to create this narrative.
Electric vehicles are definitely the future.
I'll say it, I have no idea of validity of any of these statements, need to go read. But do remember getting weird stock pump and dump emails about this company a long time ago and it always put a bad taste in my mouth.
It does sound pretty bad, doesn't it? The guy certainly seems to have a problem with telling the truth. I think it's crazy to compare him to Musk, since Musk is actually extremely smart and knowledgeable about multiple areas of engineering. This other guy is just parotting the same lines, like "we are an advanced energy company that just happens to sell cars!". It's like the cargo-cult version of Tesla without any interesting technology or innovation. All that being said, I hope the author of this write-up has a good lawyer!
Musk has also had some interesting/uneasy relationship history with the truth. This guy does seem to be taking it quite a bit farther and leaving a lot more daylight visible between his statements and the truth.
Not close to the same thing.
Musk has a history of building and shipping successful products company after company in spite of a constant amount of people saying he would fail. (X.com, Paypal, Tesla, SpaceX, Neuralink, Boring).
Nikola is a complete fraud that collected money from know-nothing investors riding on EVs and Tesla's name. They haven't shipped anything and probably never will. Bizarrely positively portrayed in the press alongside negative Tesla stories - I imagine because it's good for clicks?
I find it hard to believe the SPAC that brought them public wasn't solely for the purpose of allowing them to steal as much as they could from the public before they shut down. No idea how well they played it - I guess we'll see if anyone ends up in prison.
At least he got to con his way into a fancy ranch in the mean time: https://www.latimes.com/business/real-estate/story/2019-11-1...
People like this make the world worse for the rest of us (and make it harder for honest startups to raise money).
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Musk has actually delivered ground breaking tech in multiple fields though. He talks big but he usually (eventually) backs it up. No other company has managed to send rockets to space and then land them again. No other company has managed to sell fully electric cars en-masse like Tesla has done.
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I'm no Musk fanboy and this isn't meant to be a defense of Musk, but in my opinion, Musk exaggerates and over promises. He'll say intentionally vague things and let people fill in the blanks and not correct them when they are wrong. It's all a little slimy and grey, but there's usually at least a modicum of truth to the things he says or he at least believes what he's saying at the time he says it.
From what I've heard recently Nikola just seems like straight up lies and fraud from trying to piggy back on the success of Tesla.
Neither are good, but one is much worse in my opinion.
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The FTC should look into Musk's statements about self-driving, how it's almost done, etc. All that does is trick Tesla owners into paying for the $8000 upgrade for a product that will never, ever come, guaranteed. It just won't happen and he keeps peddling the product like it's only a year away, for the last several years. It's outright fraud and he should be taken to task for it. And for the record, I'm a Tesla-owner.
If you set an unrealistic goal that you won't accomplish but try really hard to reach it, in most cases your end result and the progress you made along the way will be far far better than when you set a realistic goal and reach it.
I always set unrealistic bars for myself. And in the end I get more from not reaching my goal than I would from reaching a lower one.
You're pointing at exactly what allows a skilled conman to succeed: To a casual, or even non-expert observer, the difference between a genius and a skilled impersonation of a genius will appear very small. You might not be able to make the distinction, and erroneously consider them equivalent.
the big difference between a pitch and a fraud is eventual intention. Seriously, even company name implies fraud by association
It sounds bad, but I thought of another way to look at it.
Nikola's product is the brand of being a hip, "with it" electric car company, like Tesla, but different, and they are selling it to GM. It's a simple straightforward win-win, and everything that looks like fakery is beside the point. It has solid value to GM precisely because of the inflated, arguably irrational value of Tesla.
Now, I'm not investing, but it did occur to me to look at it that way. They are not actually in the same business as Tesla or GM. They're laundering cool factor.
I really like the cargo cult note. There are a lot of people building runways in the jungle hoping planes will land and bring cargo, so to speak, in tech. These people can and do make it into public markets (see Nikola) but it’s even more prevalent in private markets. It’s more important than ever to have technical people in private equity, not just VC.
He even ripped off the company's name...
This might be a coincidence but I thought it was funny that the NKLA stock symbol mimicks Tesla's TSLA symbol.
> The guy certainly seems to have a problem with telling the truth.
I actually disagree with this take but it gets close to the problem with Trevor Milton. Trevor is very unpolished. I'm skeptical of how detailed he gets with all the in's and out's with the technologies he's trying to innovate and make more efficient. What's going for him is a few things, he's partnering with many companies which means he's mitigating the company's risk. Now that Musk created the market, others want to join in and try whatever route that sticks.
Musk on the other hand, speaks in more precise words when describing a topic. Musk does sell vaporware but...eventually (behind 'schedule') Musk delivers. This lazy focus on manifesting a specific vision what what Musk is doing. He'll let the entire engineering department go, if they aren't willing to work hard at making the future a reality.
Going full circle, the energy density of hydrogen fuel cell is the future. I don't see how it's not. All you need now is for Toyota to join forces with them and you'll have an unstoppable force that will help reduce emission drastically and at a large scale. The technology is very close (1, maybe 2 iterations away) and I doubt they are far away from a breakthrough. I don't believe Milton could've focused on Hydrogen semi's prior to the success of Tesla, he doesn't have that skill but...he's making due with what he's after. He's also being wise at selling electric trucks too because the market is primed for it (read: Musk primed it).
In conclusion, there are a lot of investors deep into Nikola. If Milton gets in the way of bringing this realistic engineering challenge to market, the investors will change it up. I'm not certain of how much voting say that Milton has but...it's a good sign that he stepped back from CEO role. He's way too sloppy with his words but...he brings the hype and investors are still wanting his hype. It's messy but nothing worth doing is ever blameless.
P.S. I don't own either stock. Nor any energy/battery/car/electric stocks. I'm just interested in advancing our technology.
> Going full circle, the energy density of hydrogen fuel cell is the future.
Based on what? Just looking at the density is not enough. You have to look at the whole system from generation to actually driving.
The hydrogen system is even in the best case, assume multiple many, many improvements in mass manufacturing and so on, only half as efficient as an electric system.
Battery technology is improving at a far faster rate then hydrogen technology, its not even remotely close. By the time your predicted ' (1, maybe 2 iterations away)' happens, batteries will have made 5 iterations.
The DoD for example is already sponsoring a massive program that companies lots of universities and national labs to work on Lithium Sulfur batteries that could double or triple the density of current Li batteries while also being quite a bit cheaper.
Silicon anode batteries are already in the early stages of commercialisation and they will make commercial aviation feasible.
And even if you insist on using chemical fuel, why would you use hydrogen? If you want to drive a truck a long distance at a time, you could just use dimethyl ether, methnol or something like that. That would solve tons of problem with storage and so on.
I really don't understand why people are so fascinated with hydrogen, while it continue to disappoint for 30 years. Even in the space industry, where fuel cell used to be used all the time there use has fallen out of favor.
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What possibly could they have to offer for Toyota? It doesn't look like they did any work or even had anyone capable of researching hydrogen cells working for them.
Instead of advancing technology, they might have taken funding and credibility actual companies could have used.
The founder has so far answered just one real question on twitter, about what they were going to bring to the GM produced car: "100% a badger. We will use common parts for example; tires, window regulators, hvac, brakes & batteries to drive down cost, but the badger is completely a badger. The infotainment, displays, software, ota, app, cab, interior, user experience, sales, service, warranty etc is ours"
That's a long way to say they'll use their software and sales team.
I don't see it as very different from Tesla, since when they started there was no real technology to talk about. The CEO of Tesla is also well known to be untrustworthy with his promises, having even being formally investigated by the SEC for stock price manipulation. I don't know the future, but there is a possibility that they will also develop the needed technology to make it all work.
I have met people like Nikola's CEO, and I bet my dear life that nothing will ever be delivered, except if the technology exists to completely - I mean exactly 100% - outsource it using the cash given by others and slap a logo on the result, failing in the end anyway. When you see a company so hell bent and putting so much effort in tricking investors AND actively avoiding doing any real work, you know what's happening. If you, and more importantly people with money to invest, are persuaded that "it's not different from Tesla", that's a victory for Nikola, and their sole source of income.
> since when they started there was no real technology to talk about
That is flat false, making a automotive battery out of laptop batteries was quite a technology development. They also made their own engines and inverters from the beginning.
> The CEO of Tesla is also well known to be untrustworthy with his promises
Actually the opposite, it is well known that when he says something its very likely going to happen. As most of the things he say, no matter how crazy to turn out to actually happen.
Arguable there is no other human alive in the world today, that when he say 'We are gone do X' that more people believe could actually do it.
> having even being formally investigated by the SEC for stock price manipulation.
He wasn't investigated for stock price manipulation, he was investigated for improper communication to stock holders.
> I don't know the future, but there is a possibility that they will also develop the needed technology to make it all work.
So even after 10 years of consistently laying every year, announcing dozens of technologies that all turn out to be totally fake you still think they can do it. That seems beyond utterly blue-eye to me.
Anyone else getting Theranos vibes? As others have stated here, Hindenburgresearch is a known short-seller and so has an self interest to drive down the stock price of Nikola.
Also it was only yesterday that GM announced taking an 11% in the company for $2B. Surely GM has done their due diligence before throwing a couple of billions in? https://www.cnn.com/2020/09/08/business/nikola-gm-badger-ele...
That all said, everyone also thought Theranos was legitimate until they were exposed to be not.
I think you read the $2B upside down. Nikola paid GM $2B worth of stocks (11% of the company) to have GM manufacture its vehicles, not the other way around
You're right I misread it - Nikola is paying GM. Sounds like a no-brainer for GM to accept.
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In addition to $700M from Nikola to cover the expenses of the work that GM is supposed/going to do for them.
> Hindenburgresearch is a known short-seller and so has an self interest to drive down the stock price of Nikola.
Short sellers don’t really have an interest to lie though. If it doesn’t look like there is really a fire, it’s much better to close the position and hunt for a new target rather than trying to make it seem like a problem when there isn’t. Lies don’t help short sellers because they present a legal risk and a financial risk (the market steam rolling them as they are seen through).
Yep plus the boy who cried wolf risk (ie that would only work once if at all)
> Anyone else getting Theranos vibes?
GM + Nikola = Theranos + Walgreens
Big Co partnership !== legitimacy
> Surely GM has done their due diligence before throwing a couple of billions in?
I'm not sure there's any signal embedded in the knowledge that a company as incompetent as GM has done due diligence.
There is no rhyme or reason with GM. They’re completely incapable of innovating by themself in the electric or self driving space so they’re just throwing all their R&D budget into acquisitions and partnerships.
Started with Cruise, now Nikola, and it will continue until they’re bankrupt.
Absolutely. I also see the same FOMO dynamics at play. In Theranos' case a huge part of it was wanting to support "the female Steve Jobs". In Nikola's case it's not wanting to be left behind in auto tech while Tesla takes the lead.
The Theranos founder lived in a small apartment, while Trevor Milton built the biggest house in Utah.
Edit: Apparently what I said is incorrect about Theranos. I have heard this but I have never made a study of the company. So it might well not be correct or only for a limited time.
I'm pretty sure I am correct about Mitons house.
This is incorrect.
https://mashable.com/article/theranos-elizabeth-holmes-detai...
Massive house in Utah: https://www.latimes.com/business/real-estate/story/2019-11-1...
And the thread of the sweater gets pulled...
While not shocking given the previous track record of Trevor's previous enterprises - the most likely outcome here is that it will get very, very ugly. He also already 'cashed out' millions of dollars to buy a 32.5 million dollar ranch - one of the largest residential properties in Utah's history. [1]
Tesla's run up and general optimism around EVs seems to have triggered a gold rush of sorts, effecting other EV pureplays' stock prices (ex. NIO) regardless of progress and actual state of the technology.
While in theory I am in strong support of new financing models to bring new technologies to market(ex. these Special Purpose Acquisition Companies - SPACs) I am very concerned that if even a portion of the alleged is true, this could poison this financing route for legitimate businesses and the sector overall. A camp in the investment industry even think Tesla is a fraud, and this would only harm the narrative and long term mission of Tesla.
It would have been great if they actually took the money, utilized it with a plan and executed on the plan to help with electrification - the premise for which I think many retail investors have become involved.
Even if there was no fraud, I was always skeptical of their plan (smelled like vaporware to me) and their adamance about hydrogen as an energy storage medium without sufficient discussion on electrolyzer technology or how those unit economics work always struck me as big red flags. Seems like Nikola's plan was to combine a bunch of off the shelf parts existing from other sources into a product, in that case - where is the technology? So much of it with just the bit of digging and what I hear about it has made me skeptical.
Probably best to stay as far away as possible and see where the chips fall. I do wish them the best though, assuming there was no fraud.
[1] https://www.latimes.com/business/real-estate/story/2019-11-1...
>A camp in the investment industry even think Tesla is a fraud,
At this point in Tesla's history, how is it a fraud? It is manufacturing and selling cars. It is building batteries. I can see where some may think it is not living up to the hype/promise of returns, but they are actually making and selling product. Yet people are still claiming fraud?
I think this is a fundamental misunderstanding of what short sellers do (which is where most of the "fraud" accusation comes from). Some short sellers DO claim fraudulent behavior, e.g. Enron was famously predicted to be fraudulent by Jim Chanos.
However short selling at its core just involves the belief that a company is overvalued. In the case of extreme fraud, the "correct value" is $0. In most cases, the short seller just believes it's some amount less than the current share price (but above $0).
Tesla falls into the latter category. I'm sure some do claim fraudulent behavior, but Tesla is an interesting case because Tesla's PE is ~200 IIRC, compared to the 20 average for the automotive industry. For comparison, Amazon's PE is 120.
So if you think Tesla is ultimately a car company, or even just a "regular" tech company, it's not insane to think that it's incredibly overvalued. That doesn't mean you think it's a fraud, of course, but the subtlety obviously gets lost by many (and short sellers often make grandiose edicts that don't help their case).
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If they are losing money doing those things it isn't really much of a business.
They do appear to be generating income from operations these days, but the size of the operation has increased so fast that it is hard to analyze.
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Couldn't agree more that the sentiment doesn't make sense given what they have actually done, all of their proof, all their products, patents etc. (disclaimer: I'm long TSLA)
I'm just relaying what I have heard and read. Tesla's history is far from perfect. I think the target of issue has been their various claims and promises on 'self-driving' and their autonomous vehicle programs. Also, some possible issues surrounding the acquisition/merger of SolarCity.
And while the shorts around Tesla aren't making much noise right now given all the momentum, it wasn't all that long ago that there were some loud short sellers alleging about various accounting frauds. Some quick 'internet research' here will dig up various allegations and statements from the 'haters'.
More common at issue is that many traditional auto analysts' existing equity valuation models for auto companies 'break' when you plug in the numbers for Tesla - making it impossible to come to a 'reasonable' valuation they are comfortable buying at (as these are people investing other people's money need to be able to point to something that justifies the purchase if it goes south).
There are a lot of short sellers who lost money who were desperate for any reason for Tesla stock to fall.
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> While in theory I am in strong support of new financing models to bring new technologies to market(ex. these Special Purpose Acquisition Companies - SPACs) I am very concerned that if even a portion of the alleged is true, this could poison this financing route for legitimate businesses and the sector overall.
SPACs have been around for a long time, and they've always had a bad reputation, often used for various forms of fraud and penny stock scams. Going live via a SPAC is opaque and expensive; you'd never choose it unless the normal IPO path seemed too risky for some reason, probably because you might not be able to survive the transparency the process requires.
If Nikola is just a complete fraud, that wouldn't taint SPACs so much as it would confirm their existing reputation.
Combining existing off the shelf components into a novel design is a legitimate way to build an innovative product. The first Tesla Roadster was exactly that, all car companies had access to the technology but they dismissed it as a gimmick, who would buy a street car powered by lawn mower tech.
This interview from April 2019 was the thing that convinced me he was a fraud. https://www.truckinginfo.com/330475/whats-behind-the-grille-...
This gem right here:
> "The entire infotainment system is a HTML 5 super computer," Milton said. "That's the standard language for computer programmers around the world, so using it let's us build our own chips. And HTML 5 is very secure. Every component is linked on the data network, all speaking the same language. It's not a bunch of separate systems that somehow still manage to communicate."
This guy does not know what HTML is. What he has described is not what HTML would be used for.
And I'm supposed to believe he's some sort of mastermind behind some new age hydrogen/electric truck?
Have you listened to Jack Ma talk? He sounds like some kind of total moron in the panel discussion with Elon Musk. I know, you're thinking "It's not his first language. That's what it is" but go watch it yourself¹. The ideas he expresses seem completely unformed and make it look like he's not operating at a particularly high level.
But Alibaba is real. It's a real company doing real things and delivering real value. It's a giant success.
Now I'm not saying Nikola will be (maybe those shorts for 2022 are pretty cheap) but people speak like complete idiots and still run successful companies that they start.
¹ https://www.youtube.com/watch?v=f3lUEnMaiAU
Here's a highlight: https://youtu.be/f3lUEnMaiAU?t=789
Alibaba is real and heavily funded by the CCP. After seeing that interview last year I lost all respect for Alibaba.
It became clear they (+ANT financial) exist only because the CCP allows them to exist with heavy funding.
https://www.marketwatch.com/story/can-we-trust-alibabas-numb...
Yeah, if a CEO/director being a chronic bullshit artist always meant a company was fraudulent, I'm not sure how many legitimate companies we'd have left.
The only difference between Jack Ma and Elon in that interview is that Elon's bullshit sounds smart to us and Jack's doesn't. Every CEO's real job is to pander to their audience and hype up the company. That might mean repeating "HTML5 AI Encryption Blockchain" over and over again to roomfuls of investors and shareholders.
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Yeah, after that talk I was pretty skeptical Jack Ma was anything more than just a CCP figurehead or maybe friends with someone in the government?
He comes across as a complete idiot.
Maybe you don't need to be that smart to run a company like Alibaba, but I find that hard to believe - I suspect government protection and party favoritism plays a part.
When they are just a figurehead for a government-backed enterprise, they can be complete morons.
When you are the head of a revolutionary startup that's competing technologically with existing companies, you can't afford to be one.
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For me, this was sadly hilarious (https://www.bloomberg.com/opinion/articles/2020-08-06/it-s-a...):
"More impressive is that Nikola’s revenue for the second quarter was very small ('immaterial,' Nikola actually calls it), just $36,000. Most impressive, though, is how they earned that revenue:
'During the three months ended June 30, 2020 and 2019 the Company recorded solar revenues of $0.03 million and $0.04 million, respectively, for the provision of solar installation services to the Executive Chairman, which are billed on time and materials basis. During the six months ended June 30, 2020 and 2019 the Company recorded solar revenues of $0.08 million and $0.06 million, respectively, for the provision of solar installation services to the Executive Chairman. As of June 30, 2020 and December 31, 2019, the Company had $3 thousand and $51 thousand, respectively, outstanding in accounts receivable related to solar installation services. The outstanding balance was paid subsequent to period end.'
'Solar installation projects are not related to our primary operations and are expected to be discontinued,' says Nikola, but I guess they are doing one last job, specifically installing solar panels at founder and executive chairman Trevor Milton’s house? It is a $13 billion company whose only business so far is doing odd jobs around its founder’s house."
Edit0: formatting.
The bigger issue here is that this man was able to convince "industry veterans" to give him massive amounts of money. You can see through him in a heart beat because you're technically savvy. Clearly the people running these automakers are not.
It doesn't surprise me in the slightest why he was able to convince deep pocketed "industry veterans" to fund him, and actually understanding the social dynamics at play is important for understanding society at large (and can be very helpful when it comes to making money).
There is a metric shit ton of pressure on these legacy automakers to compete with Tesla. Sure, you may think Tesla is a relatively small slice now, but the leaders at these companies are extremely scared of falling behind technologically to the point where they are uncompetitive. I'm quite sure a lot of people at GM were skeptical, but I bet a lot of them also did the subconscious calculation "What's worse for my career, losing out on a deal with an innovator like Nikola and falling even further behind, or going with Nikola, in which case if it fails we're not much worse off then we were originally?" Against this backdrop it's easy to see how a scammer can take advantage of this dynamic and even play legacy players off each other, e.g. "Well, you could choose not to invest in us, but then think how much further behind Tesla you'll be. And you know we're talking to Ford, too."
Seriously just watch any of the guys rants on YouTube, you don't have to be technically savvy to see through his bullshit. Watch any of his interviews on YouTube. I like this one with Jim Cramer trying to nail him down on his pre-sales number on the Badger and laughing at him later
https://youtu.be/OPhN8saJkAI?t=377
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There might not be many options for investors that want exposure to the EV market but missed the boat on Tesla. I'm sure plenty thought it could be the Lyft to Tesla's Uber.
It will really only fail when the money dries up. As long as they can keep raising money, they can keep the fantasy alive long enough to lure in other investors.
I mean you could google the guy and find the book he wrote _on running scams in NY_.
The domestic auto industry is a jobs program not a real business.
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Money talks...even if it is BS, the world is full of it.
Before you downvote this, keep in mind that the founder comes from a Mormon background - perfect upbringing to be trained as a salesman
Another example of selling snake-oil ideas comes from the author of the book "The 7 Habits of Highly Effective People":
"According to Clayton Christensen, The Seven Habits was a secular distillation of Latter-day Saint values." https://en.wikipedia.org/wiki/Stephen_Covey
sorry, what is the example of? Also, how is the Mormon background good for being a salesman?
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"HTML5 Super Computer" lol, thats the best sequence of words i've heard this year
That's certainly the funniest bit, but "so using it lets us build our own chips" is the biggest head scratcher.
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Many people feel the same way listening to Elon Musk talking about AI and self driving...
And yet every Tesla owner tells me that their car is just one update away from driving itself across the country.
Musk states that his company's intention is to advance computer vision to the point where it can safely drive a car, and then offer this technology with the sensors deployed in their current vehicle fleet.
Milton stated that using a very secure HTML5 supercomputer that's linked on the data network allows them to build their own chips.
These statements are not equivalent in what they imply about the speaker. It's not subtle.
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It's not the same: https://www.youtube.com/watch?v=hx7BXih7zx8
You can watch that talk and see the approach they're taking. Maybe you're more skeptical than they are about the near term possibility, but you can see that the work and progress is real.
The AGI risk is real too.
What Milton said doesn't make semantic sense, it's not a question of timelines.
https://intelligence.org/2017/10/13/fire-alarm/
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> just one update away
What's the over/under on cold fusion before self-driving?
It used to be more fun before the search engines start pushing age over relevance, but searching for 'elon musk claims' is entertaining.
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I got the HW3 hardware update in my MX a few weeks ago - and from what my car has demonstrated to me what it’s capable of - I sincerely believe Tesla will have driveway-to-driveway autonomy for simpler scenarios (e.g. suburbia and semi-rural areas, with clear road-markings) within two years.
I appreciate that what I just said comes with a huge caveat - and that probably 80% of the work will be hammering-down everything else - but consider that Google’s Waymo is already well-past that already.
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> And yet every Tesla owner tells me that their car is just one update away from driving itself across the country.
I just drove my Tesla half way across the country and back last week. And based on the performance of Autosteer and the neighboring car visualizations they're nowhere close to Level 5 self driving.
Love the car and am a big Tesla/SpaceX fanboy. But I won't believe it'll achieve Level 5 until I see it.
> The entire infotainment system is a HTML 5 super computer,
Should have added some blockchain while he was at it.
They're pursuing a patent for that, so he was reluctant to talk about it. The blockchains are embedded into HTML tags using proprietary, secure data attributes. It's hash encrypted using CSS3, which is the standard algorithmic formulation language used by all programmers to control how data is shared.
"At our new hospital, we're using stethoscopes," he said. "That's an industry-standard tool for doctors around the world. Because of that, we can perform advanced procedures, like hemorrhoidectomy and brain transplant."
I've known plenty of manager types that have a very little understanding of the technology involved with their product. A lot of times they try to parrot what their technical team is telling them. Some can be very good at it, other sound like idiots because they have little true understanding of the technology. But that's okay, since their true expertise is in putting together a company or organization that outputs a successful product. It requires being able to manage and inspire people to get the best from them. And countless other parts that I can't even imagine. It does not require a CEO to get too deep in the weeds of the technology. A CEO does not have to know everything, he just has to hire and manage the people that will do the parts he doesn't know. Technology has very little to do with that but expertise on how people work and function has everything to do with it.
BTW, they sound like idiots to the people that understand the technology but that's a small subset of all people. Most people have even less understanding than the CEO. So they get influence by his charm and finesse. What most people would call BS around here.
Actually - just the opposite.
Most people do not really know how HTML works, and nobody but technical people should really.
Or at least - they could make major mistakes in communication.
If he was 'my CEO' I would understand that he was trying to say 'Infotainment is a platform, built on extensible tech that everyone knows how to use' - this is fair.
It seems like Nikola is a fraud, but this isn't the red flag actually. This is standard miscommunication.
I agree this could be easily understood as a result of some internal talks where they switched platforms and he got a report saying "We don't need to rewrite the infotainment system, it's mostly HTML5, so we're all good even after we switched from X to the customised ARM foo". It's still stupid, but doesn't mean he's actively lying here.
I'm not convinced thats fraud but probably just "CEO bullshitter who only speaks in buzzwords in public" (referring to the interview). I also don't think anyone at GM (through whatever technical diligence they hopefully did) didn't bank on HTML5 as a chip-enablement strategy.
Wow that is just complete gibberish. I haven’t been plugged into these incidents and didn’t realize there were such issues. Is this an indictment of news media? I feel like I’ve mostly been fed vague but confidently positive news bites before this discussion.
At least he's talking about the infotainment system, and not an internal system or something where there's no conceivable use for HTML/JS.
I wouldn't care if you're building an actual website, calling something "an HTML5 super computer" is total bullshit in any context.
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> "so using it let's us build our own chips"
what is the connection between HTML5 and building your own chips?
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It's hard for me to wrap my head around time. Over 20 years ago the CxO of Sun came to one of the big automotive events and said a car is just a browser on wheels. I think he was selling coffee. Er Java? Been too long.
You think he's a fraud simply because he bullshitted his way through some computer sales pitch? In a way, I have a ton of respect for people willing to even try this kind of thing in public
If he could talk lucidly about things like HTML I'd think that lent more credence to the possibility he didn't have a clue about hydrogen
edit: for the downvoters, if you haven't seen one of these "bear thesis" articles before, understand you must do at least as much homework as the bear claims to have done before accepting anything you read. Of course Nikola is a dodgy company, but it's also a social phenomenon. That's the value in it for the likes of GM, and also for the average investor -- including the professionals. At one stage YouTube was the largest video piracy company on the planet before a larger company swallowed them up and cut deals to legitimize what they'd done. Meanwhile, everyone knew the brand. You can consider what's happening here to be something roughly comparable
You have a ton of respect for people who will lie through their teeth to make a sale?
Why should we not assume his HTML5 knowledge is roughly equivalent to his hydrogen car knowledge?
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Fair enough. But what kind of person lies about the existence of solar panels on their roof?
> Trevor claimed that Nikola’s headquarters has 3.5 megawatts of solar panels on its roof producing energy. Aerial photos of the roof and later media reports show that the supposed panels don’t exist.
I don't have respect for people that bullshit their way through situations that fraudulently entice investors to put their money into a company.
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it's the cherry on top of everything else he's bullshitted through.
nothing about his background or experience gives any legitimacy to him being in a position of "electric truck CEO and mogul"
I find the audacity of the fraud hilarious.
They pulled a truck up a hill and let it roll down unpowered, using it in a video demonstrating their new EV technology when nothing worked. Who does that.
I like how they carefully called this demo "in motion", not "driving" or even "road test". It's definitely in motion!
Startups do this. All the time. But they're typically software not hardware demos so much easier to fake.
This would be Google creating a static page of results and pretending they had crawled the data when they demo’d submitting a query.
Uber manually arranging a driver / passenger pick up and animating a vehicle on the map along a predefined route, etc. etc.
It’s edgy to say startups do this, but there hasn’t been a startup conducting this level of fraud so openly since Theranos. And Nikola is a publicly traded company valued at billions.
this sounds equivalent to recording your demo of your website to play during a conference because you aren’t sure it’s gonna work on stage. done that plenty of times
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There’s a difference between Nikola’s repeated product announcements that haven’t led to actual products, versus rigging a demo of the half-working alpha version and then shipping the real thing shortly after.
Virtudyne:
https://thedailywtf.com/articles/Virtudyne_0x3a__The_Gatheri...
Fake it till you make it, to the extreme.
How crap do you have to be that, if you're going to fake it, you don't just tow it and digitally remove the cable or put an electric motor in or whatever? It's just a such laughable approach.
This is the secret of the startup business.
Every start up ever
i dunno - here is the video in question: https://blurbsurfer.com/index.php/video/p9reimwb that really look like a hill to you?
Read the article. It discusses how they tested with the same road, and were able to put an SUV in neutral and achieve a cruising speed of 53mph using that same road.
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Yeah, that actually does look like a hill. It appears to me the road rises up to the ridge seen in the background.
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No, it doesn't look like a hill. But it doesn't matter what it looks like. They found the exact road, and it has a 3% grade.
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You can make a vehicle roll "uphill" if you choose the spot carefully.
https://en.wikipedia.org/wiki/Gravity_hill
Am I the only one who reads these stories of high level fraud (this one and Theranos) and think: “why not me?” I’d like to say I have higher ethical standards, but these conmen have cashed out a loooot of money doing this, and I think my ethics would also get flexible as dollar amounts get into the 8 or 9-figures. But then I realize, this type of a person has been doing this their whole life. This guy bilked his partner out of $50k in selling a $300k business. I just wouldn’t think it’s worth the hassle to lie through my teeth to everyone around me for $50k. That’s the difference between us and them, I guess, it’s the small-time fraud you have to slog through to make it to the big-leagues of scams.
I think one place where Abrahamic religions steered us wrong ethically is a philosophy that being a good person is a lot of work and being an evil person is easy.
When I look around, it seems more the case that being a better person or a worse person both take a lot of work. "Chaotic neutral" is probably cake by comparison.
If you want to be a billionaire you have to practice, practice practice taking more than your share, and some days that'll count for a percentage of your goal. Or put more simply, it's not about the $50k, it's about the muscle memory.
You'll risk jail. And never having an honest job again. And having to hang out with the sort of people who enjoy the company of con artists. And lying through your teeth all day. And actively spending your creative energies making the world worse. And deliberately stealing money from people who might have used it for something useful. And gaining the lifetime hatred of these people. Who will want to punish you personally, financially or even commit acts of violence against you.
If you've really thought through it and still figure it's a good idea, I'd honestly like to stay as far away from you as possible. Because I'm pretty sure that would represent a judgement that's at best very unsound, and in the more likely case indicates a personality that's dangerous to their surroundings.
Fully agreed.
There are many would be con artists that have not gone further than counting cards at the local tribal casino. I would argue these men are equally unethical but success at this scale requires persistence, hard work and talent. In this case, the talent is lying convincingly.
There's a reason why sociopaths are over-represented at the highest levels of business. It's a culture that self-selects for these traits.
> ...it’s the small-time fraud you have to slog through to make it to the big-leagues of scams.
Not just that. It is still a very, very big world to ply their scams upon. While it has gotten a little better with the Net, there is still plenty of room to work with.
There are still tradespeople that still rack up a pile of pissed-off clients and lawsuits, then walk away to another province/state.
How many utterly toxic managers have you worked with that completely trashed a department to glorify themselves, collect the big bonus check in Year 3, then walked off to the next company before the entire rickety house of cards comes crashing down? Until business culture attitudes change on short-tenures, swapping long-term stability for short-term gain remains the easiest scam to run for easy gains.
How many minus-X engineers have you worked with who were extremely good at socializing with management, held up process and procedure as a shield to ward away anyone from asking them to do anything, then pushed to the front of the crowd when a delivery milestone is achieved?
How many products and services outside of your area of expertise have really good marketing, even good "reviews", but upon actual real world use are complete wrecks, or have critical defects that sit unaddressed for years or even decades? Our socio-political-economic system is extremely good at broadcasting the availability of goods and services at light speed, but we're still stuck in the Bronze Age of speaking individually with each other in the market bazaar literally word of mouth to find out the worth of those economic transactions.
There is an entire industry thriving within Amazon's ecosystem doing exactly this, drop shipping from China factories spewing schlock that only marginally works long enough to prevent monetary clawbacks. Personally, there is an entire product category I've tried 7 different vendors all with great Amazon ratings where every single unit has failed within six months of use: Lightning audio splitters (you can split a Lightning port into either two Lightning ports, or a standard mini audio jack and a Lightning port, typically to plug in a headset and keep an iDevice powered at the same time...like needed for regular marathon web conferences where Bluetooth headsets don't last long enough). I made a Franken-dongle comprised of an Apple-branded Lightning-to-HDMI converter, HDMI audio extractor to RCA audio plugs, and RCA audio plugs to female mini jack audio plug to work around this.
It takes a large amount of effort to find reasonable comparisons between products and even then, many manufacturers change up quality when they "reach the top" and want to cash out on "winning" the quality-value race. Todd at Project Farm exemplifies the absurd amount of work it takes to compare pedestrian tools and supplies. The many, many posts in neighborhood chat groups/forums asking for recommendations for a good electrician, HVAC, plumber, dentist, etc. exemplify the general failure to set up non-gamed, non-compromised review systems integrated into the economic system.
And illustrate the general failure of capitalist transactions as we know them today to convey granular merchant-to-customer information like say, a market butcher with a cook: the transactions lossy-compress away all the time-bound and quality-bound attributes of the transaction itself into a single number, and then lossy-compress away again that single number into a multitude of streams of numbers (revenue/income/profit/loss) inaccessible to customers except for the largest publicly-traded entities at the grossest levels, and then lossy-compress away on top of that with credit availability to mask and obfuscate real-time effects. Customers are left with a huge latency between actual supplied quality in real-time to rough reputational "feel" from aggregated opinions over a long period of time.
Fraud is not a bug of such a system, it is a vital operating feature for far too many economic actors.
"Hindenburg Research" is already an excellent name for a short seller, but in this case, they are short selling a company creating cars powered by hydrogen fuel cells. 2020 continues to be an incredibly on-the-nose year.
> Initial Disclosure: After extensive research, we have taken a short position in shares of Nikola Corp.
This is a great example of why shorts are socially valuable. Without that incentive who would go to the trouble of doing all this research to uncover (possible) fraud? This topic that comes up a lot on Money Stuff, where its easier for private companies to hide misbehavior because you can only short the public ones.
Short sellers, especially public ones, have a critical role in our equity markets. They remind me of defense attorneys. It's a sometimes thankless job and nobody likes you for being too good at it, but it is absolutely vital to keep the system healthy. Kudos to these guys for doing the fucking work.
I liked the bit where someone rented a car out in the middle of the desert and rolled it down a low grade hill for several miles to prove the truck demo was unpowered.
I have been watching Nikola for years wondering why anyone believes its BS, I didn't realize the deception was this blatant and deep, I guess like many I didn't do real due diligence, but I didn't invest millions in the company either.
Very sad and disheartening to see it continue and get further investment, just make me think that telling the truth does't pay, selling lies does, fake it till you make it taken to the extreme, similar to Tharanos.
The over promise under deliver approach Musk uses annoy's me but there is something real there, real results, Nikloa is literally riding on a play of a name of another company. At least Musk recognizes the issues with Hydrogen and he obviously has a grasp of the technical issues:
https://www.youtube.com/watch?v=yFPnT-DCBVs
It took me years and years to get a story that made sense about Corbin Motors and why they flamed out making the Sparrow and trying to bring out the Merlin.
It will probably surprise nobody here that the Pareto Principle applies to large scale manufacturing. Hand building a vehicle is 10% of the work, and the other 90% is a very different kind of work and skillset that is easy to drown in. A bunch of things you just figured out how to do well, you need to stop doing entirely because a machine or a vendor should be doing them for you. Along with all the people and equipment you acquired to do it.
You have to stomach writing off a bunch of equipment, swallowing your pride and taking advice from people who have no sweat equity in your company. And as a cherry on top, you probably get to be the asshole that has to fire John Henry, who has been here since before the machines.
From the link:
Nikola’s Director of Hydrogen Production/Infrastructure Is Trevor Milton’s Little Brother, Who Worked Paving Driveways in Hawaii Prior To Joining at Nikola
Nikola’s Chief Engineer: A Background Largely in Software Development and Pinball Machine Repair
The younger brother actually delivered value to customers by pouring concrete and paving driveways, in contrast to Nikola’s record to date.
i mean, u gotta admire something about the guy, to me this is hilarious.
I was wondering, how on earth this company even came to be listed on NASDAQ, since they have no products and no revenue.
So I looked it up and basically it looks like they acquired a company which was ALREADY listed on NASDAQ then renamed it.
> In March 2020, Nikola announced its plans to merge with VectoIQ[10] Acquisition Corporation[11] (ticker VTIQ), a publicly traded special purpose acquisition company run by former General Motors Co. executive Steve Girsky. This resulted in the combined company being listed on the NASDAQ exchange with the NKLA ticker symbol.[12] Nikola’s stock began trading on June 4, 2020, a day after the merger was completed
- https://en.wikipedia.org/wiki/Nikola_Corporation
>So I looked it up and basically it looks like they acquired a company which was ALREADY listed on NASDAQ then renamed it
Not just any company, a Spac. Special purpose acquisition company. That's their purpose, they're not actually companies, but blank check investment vehicles.
It's a way to go public without an IPO. And unlike reverse mergers with actual companies spacs are clean since they're shell companies.
They're neither shady nor unusual, though.
Reverse Takeovers (RTOs) are super-common in Australia. A lot of broken mining companies whose exploration came up blank wind up sitting around still with a symbol on the ASX. This is used as an easy way to list - although the prognosis is not normally good (i.e. anyone evading the scrutiny of a listing starts a bit behind the 8-ball). Given how expensive and complex listing is, it's not the worst thing in the world.
AKA a reverse takeover[0]
[0]: https://en.wikipedia.org/wiki/Reverse_takeover
Thanks, I learned something new today!
this is interesting. i worked for someone like this who was CEO of a YC backed startup. everything was “in progress” but really hadn’t started. the stuff that was “finished” was ongoing or never happened. it got to the point where every line in a meeting about plans i had to question to find the real story. you can get very far bullshitting your way
I think it’s a bit funny how some discussion in this thread has veered into denigrating Musk — who is at times one of the ten richest people in the entire world, and who ships products that millions of people have bought or aspire to purchasing, and who is predominately responsible for ushering in this entire era of the electronic car.
Don’t forget that “Hindenburg Research” (seriously?!) stands to make many tens or hundreds of millions of dollars based on whether they can convince a significant number of shareholders that what they are claiming is true. And also that if they are successful in doing so that it also becomes a self-fulfilling prophecy.
I have no reason to believe or disbelieve any claims being made in TFA, so the only thing I can say for sure is that that this “report” is in no way altruistic.
One of the very precarious notions around short selling is the financial incentive it provides to ruinously slander a company, and the very meager legal protections a company has against defamatory claims that short sellers make — in the name of “analysis” — against a company that they stand to make a fortune from if it fails.
Without knowing anything one way or another about Nikola, the only thing I can say for certain is that if Nikola misstates a material fact to investors they can go to jail, whereas if “Hindenburg” gets their facts entirely wrong they face no repercussions. They have no duty to the shareholders of Nikola stock, and the legal peril of being even willfully wrong in their analysis is minuscule compared to what Nikola officers could face from the SEC.
That’s just the grain of salt I would carefully consider before reading anything that Hindenburg puts out.
Are you long on Nikola?
The group releasing the report stands to lose their position if their claims are false or even if the market ignores them. I’d argue it’s a lot harder to convince a bunch of people with long positions making the market that they pumped the wrong company than it is for the makers to ignore the ruse long enough to diversify the inevitable failure and pass it into your retirement fund.
You don't just short companies for fun with no ramifications. I think you’re painting an exaggerated picture of the nature of taking down a company. You only attempt to do so if you are extremely sure of your convictions and have overwhelming evidence to support your case. You make enemies and you risk losing your connection to other market makers.
I came across Nikola last month and didn’t need a report like this to smell something fishy. But this one is especially damning. I see no reason to not believe the evidence in the report.
Not long on Nikola, and like I said, I am not making any judgement on the facts or evidence presented whatsoever.
But I was long Tesla during a similar period in their own existence, while short sellers tried to make a similar case that Tesla was a fraud and certain to go bankrupt any day.
There is always a strong reason to question a report when the authors have an extremely vested interest in people believing it, and in fact when the objective truth of whether they are right is less important than how many people they can make believe that they are right.
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Yes, "Hindenburg" is a bit on the nose, and they own up to it on their "About" page[0]:
>We view the Hindenburg as the epitome of a totally man-made, totally avoidable disaster. Almost 100 people were loaded onto a balloon filled with the most flammable element in the universe. This was despite dozens of earlier hydrogen-based aircraft meeting with similar fates. Nonetheless, the operators of the Hindenburg forged ahead, adopting the oft-cited Wall Street maxim of “this time is different”.
>We look for similar man-made disasters floating around in the market and aim to shed light on them before they lure in more unsuspecting victims.
Looking at this piece I feel like Mark Baum when he met Greg Lippman (changed to Jared Vennett in "The Big Short"): They are "so transparent in [their] self-interest, I kind of respect them."
[0]:https://hindenburgresearch.com/about-us/
The fraud is not interesting.
The fact that big companies and Big CEO's are stupid and incompetent is the interesting thing.
Everyone who worked on this deal at GM should be fired along with the CEO.
I once worked at a 'Big Company' that thought about buying n Mp3 player. Everyone loved their CEO, their pitch, the box, product looked slick.
We were going to buy it. I took it home and tried it and it was garbage.
Literally our M&A team, execs, due diligence and nobody bothered to fing try the dam product* and use a little bit of common sense to ascertain whether it was 'quality' or not.
This was not fraud, and of a much smaller scale, but it's just incredible how big the 'blind spot' so many executives have.
Edit: I said executives were 'stupid' they generally are not. They just have gaping holes in their abilities, that enough ego doesn't allow them to even see themselves. It's understandable they don't want to look weak, but insane that they don't do background/deep checks.
If I were a CEO I would include 'product & IP validation' right up front as part of due diligence - not just by 'accredited people' (because you can't get a 'CA' in tech) but by people you trust.
Edit 2:
"Trevor has appointed his brother, Travis, as “Director of Hydrogen Production/Infrastructure” to oversee this critical part of the business. Travis’s prior experience looks to have largely consisted of pouring concrete driveways and doing subcontractor work on home renovations in Hawaii."
Oh please make this into a Tiger King Netflix special ...
Maybe we'll get a Good Will Hunting version. Concrete pourer solves what billions of dollars and academics could not for years. I would watch it.
Totally reminds me of Theranos. "Charismatic" (I put that in quotes because they're only charismatic to a certain group of people, I think the more "mechanical" thinkers like myself view them about as charismatic as a used-car salesman) founder who the industry touts as "the next Jobs/Musk" excels at sounding like a ton of bullshit but is able to convince well-heeled investors to pony up a lot of money due to FOMO.
"Huckster" is the word you're groping for, I think.
Does anyone have a contrary spurce of positive evidence that Nikola honestly does have valuable working technology? I have not made any effort to dig, but what little I had seen of Nikola so far seemed more hype than substance so the accusations here seem pretty believable.
The most charitable thing I've seen is some of the videos that came from when Trevor invited several popular Tesla oriented YouTube and Twitter personalities to Nikola HQ for a day long tour and Q&A. Sean Mitchell in particular has a pretty even handed take.
[0] https://www.youtube.com/watch?v=L6R5PuEl028
[1] https://www.youtube.com/watch?v=9arSTJLsa_8
I’m not big on trading individual stocks, but I own a bunch of long puts on Nikola. I don’t know any other company that seems as likely to go to zero (other than companies like Hertz, where everyone knows so the options are priced appropriately).
Be careful with those puts. It’s entirely possible to be right and still not be able to close out your position because the underlying is halted/delisted.
The market can stay irrational longer than you can stay solvent
I think the flood of retail investors with disposable income and government benefits is leading to absurdities in market pricing. See: Hertz skyrocketing after announcing bankruptcies.
After all, the stock has dropped 90%, how much lower can it go right?
Well, to the new investors, all the way to 0.
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Halts are temporary (generally a few hours to a few days). If it's delisted from NASDAQ it will almost certainly move to another exchange (OTC / pink sheets) and the stock will still trade.
If the stock truly is wiped out and common shareholders equity is 0, you can exercise the put, receive 100x the strike value per contract, and deliver nothing.
Source: https://www.optionseducation.org/referencelibrary/faq/splits...
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Yeah, I'm pretty confident Nikola is a total fraud that will go to zero but it's still hard to make money even knowing that.
How long will the fraud last? Isn't your return limited by the difference available under the put?
I generally stick to calls because it's way easier to make money in a company you know is good and it's easier to capture the upside (Peloton for me recently).
Market seems skewed this way, it's a lot harder to correct the price even when you know it's total bullshit. Seems likely to allow frauds to go on longer.
> Isn't your return limited by the difference available under the put
It is. Max profit when stock prices hits zero. It can be still a massive return compared to the premium invested.
Assuming the house of cards falls before expiration, of course.
Premiums are rather high on NKLA puts too.
How is Peloton a good company can you please explain?
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The sad part for me is that this reads like a profile of a "successful, new age, startup entrepreneur" relying on the 'fake it till you make it' mantra betting other people's money on the outside chance they can figure out how to do what they claim they already do before everyone else catches on.
I would have expected that GM's due diligence team would uncover this sort of stuff prior to taking an 11% position in the company.
Which proves to me, once again, that the way to get rich is to defraud people with a lot of money, and not a lot of insight.
In fairness, GM got $2 billion worth of Nikolai stock for future vague work.
The work they are supposed to be doing for Nikolai is the same work they'll be doing for their own EV trucks (that they'll have to have at some point) so you can look at it as GM being paid by Nikolai for R&D.
I would still not do this deal if I was GM.
The probability of Nikolai bursting in the flames of disgrace and litigation before they'll pay GM for anything is 99%.
GM can only sell 30% of stock after a 1 year (and additional 30% each year after) so by the time they can cash in, it'll likely be worthless.
And Mary Barra will have to explain how she got taken by an obvious fraud. It might end up costing her a job.
> I would have expected that GM's due diligence team would uncover this sort of stuff prior to taking an 11% position in the company.
It's GM, so it wouldn't shock me. But as others have pointed out, the deal isn't quite as bad as it sounds.
> relying on the 'fake it till you make it' mantra betting other people's money on the outside chance they can figure out how to do what they claim they already do before everyone else catches on.
This really does seem like the de facto path to unicorn status. SoftBank and WeWork, Theranos. I would also throw in the soon-to-IPO Palantir and Snowflake. Both seem to be held in the air on pure hype on incredibly lackluster fundamentals. Uber is a decade old now and no one knows their end game. They seem to either be holding out for all taxi services to die off so they can start fleecing their customers, or on pie-in-the-sky hopes of a self-driving fleet of vehicles (owned and insured by who, I wonder?) I personally don't see anything "free market" about these obvious market manipulations via heavy subsidies. This sort of winner-take-all behavior will likely hurt consumers and choice in the long run.
But back to your main point, this is just the Minimum Viable Product nonsense taken to its logical extreme. How often have you seen the advice to just toss together a demo, fake website, or whatever and collect email addresses and/or get customers paying real money upfront for a product that is pure vaporware? It's the very first thing people tell you to do to verify a market. I have yet to see a startup that wasn't a little bullshit. Perception is reality today. That's what all these "fake it til you make it", "move fast, break things" type of people remind you, relentlessly.
GM likely knows this. They didn't buy 11% in the company. If you actually read the agreement its basically Nikola buys lots and lots and lots of stuff from GM and they pay part of that with that stock, but they also have to pay significantly in cash as well.
GM also would retain the right to all the fuel credits and those could be valuable.
If Nikola is successful, GM profits with a great deal. If its not GM doesn't actually lose much. only the time it engineers spent on cooperation with Nikola and potentially some tooling cost.
Hindenburg Research is a well known short seller.
And they're short selling this position because they have good reason to believe the stock price is severely overinflated due to fraud. If what they're saying is true (and they provide lots of evidence) then this company is basically worthless.
Short sellers take positions because they believe stocks are overvalued, at least in the short term, and at least can be made to look that way with sufficient negative marketing. When they share their market research with lots of adjectives, but oddly do not share any of the positives that a company may possess (and why would they?), then any investor acting on that one sided information has possibly done himself a significant financial disservice.
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To be fair : they explicity state their position ( they are indeed short ) at the end of the article.
They also disclose immediately after the summary at the start (bullet points).
Initial Disclosure: After extensive research, we have taken a short position in shares of Nikola Corp. This report represents our opinion, and we encourage every reader to do their own due diligence. Please see our full disclaimer at the bottom of the report.
This is within 5 minutes of reading so I don't know where you got the 'end of the article' from.
(I read the report this morning so they didn't added it after ward.)
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It’s before a zillion background addendums, so not quite at the end think but it would be fairer to do so a lot earlier.
Reason? I think most readers would stop reading this (IMO) badly written and badly formatted avalanche of statements (which may or may not be true, but the form in which it is presented doesn’t give me confidence that it is) before hitting that info.
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Articles like this are exactly what short-selling is supposed to be for: encouraging people to do deep research and find overvalued stocks.
That’s an awfully tasteless choice of a name then. They are looking for companies that are going to catch on fire, crash and burn?
Huh. I actually didn't catch that until I read your comment. I think it's a great name.
In any case, I think the "too soon?" window has closed for the Hindenburg Disaster.
As is sometimes noted, the Hindenburg is known as a gigantic disaster, but only a little over a third of the people on it died, which is probably better than you usually get from an airplane that explodes in a fireball at 600 feet.
So maybe they are looking for companies that are going to have extreme PR disasters, regardless of actual consequences.
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They're looking for companies that are fatally flawed but present otherwise. Kind of like the Hindenburg.
Hedge funds are not usually terribly concerned with marketing image. See, for example, Cerberus Capital Management, the former owner of Chrysler, which saw fit to name itself after a three-headed dog that guards the gates of Hell.
Yes, and it's a good thing. For once lately, this is the market doing what markets should be doing -- fair price discovery
Why do I cringe when I see "at a high rate of speed" where "at high speed" should be?
Same reason I cringe when people use “as per” where a single “as” or “per” will do (per means as), “thusly” instead of “thus”, and, my personal anti-favorite, “individual” to mean “person”.
It’s a special kind of pretentious language that people use to make them seem more authoritative or accurate/deliberate. It’s manipulative.
For me "leverage" instead of "use" is like nails on a chalkboard.
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It's the same for me when someone says, or writes, "as of late" instead of "lately". Sometimes people think that more words make their writing more professional, but it's usually the opposite. Sentences that are more polished and concise are the hallmark of professional writers.
I also cringe at that phrase, so you're not alone. It seems particularly prevalent among police officers. I guess it's just part of "police English."
Every group has its own language and jargon, used to signal group membership. It doesn't have to make sense grammatically or logically.
Reminds me of Magic Leap but even their bullshit wasn’t this thick. At least they shipped something I guess.
>On the morning of September 8, 2020, Nikola announced a strategic manufacturing partnership with General Motors, sending shares of both companies sharply higher.
Interesting that GM seems to be making a lot of moves at once.
https://www.cnbc.com/2020/09/03/gm-and-honda-to-estabish-str...
I know Hyundai Motor started shipping production model of fuel-cell truck in July 2020. They are planning to ship 1,600 hydrogen-powered Xcient trucks to customers by 2025.
https://www.autoblog.com/2020/07/08/hyundai-xcient-fuel-cell...
And then I ran into this article. https://www.autoblog.com/2020/08/13/nikola-hyundai-hydrogen-...
Trevor Milton, founder of Nikola Corp, said he would like to cooperate with Hyundai. He said he had twice made proposals to Hyundai that were rejected.
They said that they would release a report on a well known company but this is a little disappointing. I think everyone knew that Nikola was pretty shady to begin with. After all, it’s not everyday when the company sells merch that revolves around their trading symbol
So it seems GM didn't really give any money to Nikola ? The article mentions they get 2 billion equivalent in stocks for non-cash contributions and 700 million in reimbursements from Nikola.
Nikola seems to be little more than an idea but this report won't sink their ship. The reality is that the world is looking for the replacement for our carbon based energy system. Even if he just comes close to making a dent he and the people around him will be well rewarded. Everything starts with a dream, he seems to be a bit farther along than that. I won't invest but the car companies should at least help him make his dream come true. It will benefit all of us.
I searched my heart for sympathy, and all I found was this bucket of crocodile tears.
Someone sold GM on a fraudulent electric vehicle future? Let's ask some former EV1 owners how that feels.
For those who have read “Bad Blood”, which details the fraud and unethical practices behind Theranos, this deeply comprehensive account of Nikola feels like deja Vu. I wonder if the same power dynamics are in play here as well, making the truth hard to recover from those close to it while an incompetent news industry continues primarily writing positive headlines that enable the fraud.
Check this one: “ elaborate ruse—Nikola had the truck towed to the top of a hill on a remote stretch of road and simply filmed it rolling down the hill.”
nikola stock only down 11% today, market cap 14bn. is this report credible at all? why is the market not taking this more seriously?
Because Nikola has been excellent at selling their story to a broad set of people using social media and youtube. And many of these don't follow reports like this, plus the anti-short backlash from the hardcore fans and investors is strong with reports like this.
They are 'the next Tesla' but 'better' because they use 'hydrogen'. And every 'blogboy' knows that hydrogen is the real technology of the future. So when a untypical CEO from a Tesla like company makes big claims and has amazing presentation and videos to back it up, many buy it.
Nikola did clever things like suing Tesla over their truck design, to get massive exposure threw the Tesla hype machine with the moto bad publicity is publicity. They consistently try to get into all the Tesla and EV influences and made it a point of trying to get them onboard. Trever Milon often competing on Tesla, comparing themselves to Tesla and so on.
He literally says things like 'There are few people who can out-Elon Elon but I'm one of them'. That sort of talk sells well.
Nikola for 4 years consistently trying to insert itself into the conversation and that has really payed of for them. They have never done anything but get mentioned right along companies established car makers. In reality Nikola is far less of a company then Rivian, but much better known.
This report only came out today, and it is very lengthy, and its claims likely need independent verification.
The stock market is not and never has been rational.
> Trevor has appointed his brother, Travis, as “Director of Hydrogen Production/Infrastructure” to oversee this critical part of the business. Travis’s prior experience looks to have largely consisted of pouring concrete driveways and doing subcontractor work on home renovations in Hawaii.
This might be one of the best parts.
What of this article at cnet, where they show a working truck used by Budweiser in 2019?
https://www.cnet.com/roadshow/news/budweiser-beer-nikola-hyd...
I totally agree here. Following this space for a long time, Nikola has always been by far the shadiest of all these companies.
They were one of the very few companies that claimed revolutionary battery technology. This is an instant red flag and a huge one. New revolutionary batteries don't just just happen.
Sila Nanotechnology, is only replacing anode materials, and they have been at it since 2012 and don't expect to be in cars until 2025. Quantum Scape, who want to make Solid State Li Anode batteries is not gone be in cars until 2025.
There were a number of other companies who also did this 'we have revolutionary batteries'. Some actually believed they did. Dyson is a good example, they wanted to create a car, and to achieve their targets, they invested lots of money including in batteries. However since they are a honest company they eventually admired that they couldn't hit their engineering targets and abandoned the project.
A Nikola competitor in the arena of bullshit spinning is Henry Fisker. His first company made lots of nonsense claims, including about batteries, but unlike Nikola they actually went threw the trouble and made some investment in future battery tech, just not credibly commercial ones. They went bankrupt. His new company is right back to the old bullshit spinning way but they have lower their ambitions and just open say they want to buy the VM MEB platform, now they are gone be the most 'sustainable' among other claims.
As a comparison, Tesla 'revolutionary' technology at battery day will likely not be a silicon anode or a lithium anode, those are simply not ready for commercial use. Revolutionary battery technology would be 10-20% energy density improvment and 30-50% longer lifetime maybe 2x faster production speed, and Tesla has been working on this for 5-10 years and have spent many 100s of millions acquiring a set of companies and having research agreement with multiple universities that all work in collaboration. In total I would guess to really bring a new cell to market at scale, you are talking 5-15 years and 5 billion $, and that is still with basically conventional cell chemistry.
Much of the same can be said about Fuel Cells. Toyota, Honda and also the Koreans have been banging their head against the fuel cell wall for 30 years, with heaps of government money to back them up. They know they can't make it work, even with their massive resources. In personal vehicles they are not competitive against EVs in the slights (while also not being an improvement in CO2 compared to Gas) while in trucks they are not competitive with Disel or Natural Gas, and soon electric trucks are gone take the majority of routes over as nobody can compete with their price on these short and mid distant routes.
But Nikola are gone make it, and not for a geographically small place like Japan, but for the gigantic US without much government support either.
Another topic is that of product announcements. If you follow Nikola for many years, or you go back to 2016 and look at their announcements there is a funny effect that happens. People can say about Elon Time what they like, but mostly the products actually do come out and often are improved over the original announcement in a number of ways. Nikola shows the exact opposite pattern. It goes something like this, announce revolutionary new product but its 3-5 years out. Then progressively lower the specs over time, while pushing the time to market out further.
The hype for anything EV related has been insane. Quantum Scape is a fine company for example, but they have valuation that is insane for a company that is not gone make real money for many years and not gone make profits for many more after that. They essentially have a technology that requires a totally new manufacturing system, while competitors like Sila can put their materials in existing facilities claim the same level of improvements. I wouldn't expose myself to a unique technology with so much competition
There are tons of EV startups and they differ widely from Lucid, Rivian being serious companies step by step putting in place a solid car company. Dynamic companies like NIO coming out of China. And there are the bottom feeders like Nikola, Fisker and others that surf on the hype.
This is gone be a massive market shakeout with Tesla being the leader hunted by everybody. Slow moving giants like VW, Toyota and so on finally realizing whats happening and taking methodical step after step. And a massive wave of startups from around the world, especially China trying to be next next big thing. Its gone be interesting to say the least.
It's my opinion that GM felt forced to enter into this partnership with Nikola because Ford was able to get into bed with Rivian when GM pulled out of that deal. For GM's sake, I hope that these guys are completely wrong.
GM will be fine if they go under. Nikola is paying for them to develop and manufacture parts of their "car" with 2 billion in stock.
If Nikola goes under... GM hasn't lost anything. They can take all the work they did and just use it for their EVs.
It's more of a reputation hit than anything. If this turns out to be as bad as these short sellers are saying, then anybody who really associated with Nikola is going to look really bad in the eyes of consumers.
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Bigger shocker here. I hope Rivian doesn't follow the same path, but I can't seem to find any real videos of their truck doing what they've been saying it's capable of either.
Hmm... didn't take all that much effort: https://electrek.co/2020/06/25/rivian-r1t-electric-pickup-st...
Where in that video does the truck go from 0-60 in 3 seconds, travel 400+ miles on a charge, charge in a reasonable time frame, etc...?
This is a marketing video. For all we know that truck could have an engine. I'm talking about a real actual video of the truck doing what it's been proclaimed to do. It's been a few years, it shouldn't be so hard to have a single video of a truck getting close to these targets.
Now GM has the unenviable task of picking up this turd by the clean end.....
Why? Their deal involves 2 billion in equity from Nikola for non-cash manufacturing work and development from GM.
GM was snookered. I doubt that Nikola has IP worth that much work
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How do we tell that this research has 'teeth'? Sounds super juicy if true! Would there be a 'ticket number' of some kind for an SEC complaint that Hindenburg filed?
This thread went to the second page of hacker news in 4 hours, while the amount of upvotes beats anything on the front page. Looks like throttling.
Holy shit. I'd be staging my fake death already.
Why were tweets deleted all the way back to June?
Now we understand how GM paid a billion dollars for Cruise when all they had was a road-follower, something GM already had.
One look at their site tells you it’s a fraud. They have nothing. Simply riding on the current fad.
I really look forward to reading the book about the inevitable meltdown.
Tesla is 17 years old; Nikola is far less advanced.
Elon Musk fanboys are jealous that Trevor Milton is doing it better, faster.
So theranos!
would a black dude been able to pull of a straight eye | face fraud like this ?
Are you saying that some races are less honest than other?
Also direct answer to your question: https://money.cnn.com/2012/04/12/markets/ponzi-scheme/index....
https://restofworld.org/2020/how-a-forbes-cover-star-stole-m...
https://www.timeslive.co.za/news/south-africa/2020-09-07-for...
Worse GM may be a zombie company.
Your taxes will always be supporting their business.
Reminds me of the GE hit piece appearing on gefraud.com that tanked the stock and is now nowhere to be seen. Nor is the guy that authored it. I’m sure they made out like a bandit on their options.
There seems to be such negativity surrounding electric vehicles in the media. I wonder if there’s a vested interest deliberately trying to create this narrative. Electric vehicles are definitely the future.
Calling a fraud a fraud isn’t antipathy towards electric cars. It’s like saying that someone criticizing Donald Trump is against white men.
EVs are the future.
Hydrogen powered ones? Most likely not, unless the fossil fuel industry manages to convince everyone they are still needed.
FCEVs are the future. BEVs are a temporary stopgap.
Well this is a first, top of HN with no comments.
I'll say it, I have no idea of validity of any of these statements, need to go read. But do remember getting weird stock pump and dump emails about this company a long time ago and it always put a bad taste in my mouth.