We View Nikola’s Response as a Tacit Admission of Securities Fraud

Take a look at Twitter, and it's pretty sad IMO to see some of the "I still believe in you Trevor!!" type responses, completely devoid of any logic looking at the actual facts. It's like these kind of cults are everywhere now.

And my take on the stock price remaining as high as it is is that there are a relatively small number of cultish-believers (maybe 5-20%, I really don't know beyond that it's a small minority), and then everyone else pretty much knows this stock is a fraud and is eventually going to 0, but is just trying to time it so that someone else is holding the bag. Very similar to how Hertz spiked after they filed for bankruptcy: pretty much everyone knew they were going to 0, it was just a bet on who could time it best.

For a couple days, news of Nikola being fraudulent were all over everywhere, and when I finally clicked on the link, it's from... someone who is obviously shorting the stock. Every short seller ever tries to convince everyone that the companies they're shorting are doing all sorts of shady stuff.

In this case, everything in the report looks legit, but the number of people credulously citing this report without anyone mentioning that Hindenburg has a massive financial incentive to have Nikola implode has been surprising.

Thank Elon.

His war on shorts has created a narrative that's gotten eaten up in the tech sector. Heck, you can see it in the comments on this post.

We poor tech companies are just the victims of these big, bad, evil short sellers. If you'd just leave us alone, man, so much disruption! We just need a few more billions and, we swear, we'll be profitable in no time.

Edit: Apparently people are getting very confused by the point I'm making here.

I'm not saying Telsa and Nikola are equally fraudulent.

I'm saying Elon Musk is responsible for pushing and promoting a narrative to de-legitimize short sellers, and in doing so, has undermined an important function in the markets that helps prevent companies like Nikola and Wirecard from succeeding in defrauding the public.

In order to have a functioning market, we need to base valuations on more than just "stonks go up".

I think the problem is people don't understand what fraud is. Fraud does not mean fake. A company can have products and still be a fraud. A CEO can lead a multi-billion market cap company and still be a fraud.

In fact the most successful frauds rely on having a real semi-viable company built around the fraud because it becomes easier to perpetuate the fraud.

Nikola was on that path too. How far would it have gotten without the vehicle demo? Without the factory? In there, there's quite likely the seeds of a viable company, but they did not achieve escape velocity (e.g. sheer cash reserves, cult of personality, and share price) fast enough to keep the press away from fraud.

If financial journalists were as vicious with other companies that the short seller community has mountains of evidence against, then half the Chinese companies on the US markets would be gone.

It was a highly proprietary process, but I later found out that everybody was doing it this way.

> That's the standard language for computer programmers around the world, so using it let's us build our own chips.

I guess he means that they built their own infotainment on HTML5 instead of some proprietary commercial car infotainment technology which would also come with its own chipset. So now they can use their own chipset as long as it can run HTML5.

> 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.

I guess it means they built a standard data bus for the car and every component can subscribe/publish to it.

You are a reporter interviewing Milton, owner of up and coming automotive manufacturer Nikola, currently being investigated for securities fraud.

"So what exactly is the problem?" you ask.

Milton looks at you as if he doesn't quite understand your question, but then smiles. "The entire infotainment system is a HTML 5 super computer," Milton said. "That's the standard technology now."

"What does that mean?" You ask.

"It means it can do everything a human brain could ever want to do, and more!" Milton says excitedly. "You want to watch Netflix? You got it. You want to browse the internet for weird fetishes that will make you feel dirty? You got it. You want to play some games? You got it."

You don't really see the point in having such a system, but you stop yourself from saying anything.

"Why would anyone want all those things in their car?" You ask.

"Don't you think it would be handy to watch movies while driving?" Milton asks.

The effect his lies have on the stock market is secondary.

Nikola has a truck that goes downhill

You also stated at one point, "This is based on my own data, owning multiple Teslas over four years."

So... why? Why do you do this?

The analogy would have worked if Trevor had actually tried to drive the "fully functional" vehicle that wasn't a "pusher" around. Even if it had failed, then we'd have seen the truth there too.