The golden child of the SPAC era, Trevor Milton, founder, former CEO and Executive Chairman of Nikola Motors, has been found guilty by a jury of one count of securities fraud and two counts of wire fraud. The door-to-door gimmick salesman – who became a billionaire with a company more valuable than Ford Motor Company (without building a single automobile) now faces up to a possible 60 years in prison and fines around $5.5 million.
No smoke and mirrors this time, Trevor
No amount of stage magic and trick photography would help Trevor Milton, as his career as the head of Nikola Motors was dissected like a frog in a high school biology class. Assistant U.S. Attorney Jordan Estes, co-Chief of the General Crimes Unit of the Southern District of New York’s U.S. Attorney’s Office, told the jury in her closing argument on Thursday, “His lies may have been on social media, but make no mistake: this was an old-fashioned fraud.”
The trial began on September 13, with opening arguments and progressed to witnesses. Paul Lackey, an engineer with EVDrive, was the one who supplied material for the infamous Hindenburg Research report that opened the first wound in Milton’s legacy.
Other witnesses who were called include:
- Brendan Babiarz, former designer for Nikola who said the prototype of the Badger pickup truck was made “partly” of components from a Ford F-150 Raptor gas-powered truck
- Chief Executive Officer Mark Russell, who learned only after joining the company that its debut electric truck had “neither a natural-gas-powered turbine nor a fuel cell” when Milton unveiled it
- Chief Financial Officer Kim Brady, who said Milton was “so hyper-focused on the company’s stock price” that when the shares fell $5 on their first day of trading, he thought something was wrong with the Nasdaq
- Harvard Law School professor Allen Ferrell, an expert on economics and the stock market, who told jurors that traders mostly shrugged off statements Milton made between the time his company went public and the time he resigned
Can Nikola survive this freak show?
Nikola paid its debt to society last December, when the Securities and Exchange Commision (SEC) brought civil charges against the company. Nikola settled with the regulator for $125 million.
The Nikola TRE BEV daycab is currently in use at some locations in the United States and is being tested in locations overseas. The battery electric vehicle is in a favorable position to take market share away from competitor Tesla Semi.
Elon Musk’s highly touted BEV is still not out of the pre-release stages, with the world watching for the “imminent delivery” of the long-promised trucks to PepsiCo’s California facilities.
While truckers are skittish on the next-generation of trucks, many like the Nikola for its callback to the flat-nosed cabover style of trucks from the 1970s. Many drivers are questioning the safety and quality-of-life aspects of the central-seated Tesla Semi due to relying on cameras to monitor blindspots that could fail and not being able to look out the windows.
The next few months are going to be interesting for the next generation of trucks. There are a lot of “put up or shut up” moments that await their arrival. And whoever can get a valid, working truck with the charging infrastructure to back it up will be the victor.