Unlike Tesla and the never-ending $TSLAQ "Tesla is nothing but fraud", it appears that they really have something here with Nikola, even though my knee-jerk reaction to the short-sellers is one of mostly disgust.
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.
In order to have a functioning market, we need to base valuations on more than just "stonks go up".
Everyone with the right ideas, the right motions, is always attempted to be silenced.
Life really is a circle.
But the US has more companies and activities going on and likely more fraud just by volume if not the regulatory capture and other issues from the current administration like secretaries who want to dismantle their departments. The administration itself is fraudulent, laundering campaign money to private property or court/lawyer costs, or simply rewarding friends like the current USPS head donating a bunch of money to the GOP then getting their position while holding millions in stock of USPS competitors. It's just so blatant and corrupt but nothing happens.
But when shorts simply make up stories out of spite or manipulation, like those guys screwing with Tesla calling it fraudulent, it's exactly like pump and dump in reverse. The difference might be that shorts are stuck when a stock is rising legitimately and have no recourse but to use fabrication.
"Pump-and-dump is an illegal scheme to boost a stock's price based on false, misleading or greatly exaggerated statements" - Investopedia
Well it's a good thing that's illegal and there are whole departments in the US government that exist to deal with it.
Funny, though, that there hasn't been (edit: m)any securities fraud investigations of short sellers in recent memory.
Makes you wonder who the real liars are: the shorts, or the targets of them?
Is Nikola and Wirecard enough, or do you want me to go digging for more examples?
https://www.sec.gov/news/press-release/2018-190
> The SEC’s complaint charges that Gregory Lemelson and Massachusetts-based Lemelson Capital Management LLC issued false information about Ligand after Lemelson took a short position in Ligand in May 2014 on behalf of The Amvona Fund, a hedge fund he advised and partly owned.
Or maybe this guy?
https://www.sec.gov/news/press/2008/2008-64.htm
> The SEC alleges that five months ago, Berliner disseminated the false rumor through instant messages to numerous individuals, including traders at brokerage firms and hedge funds. The false rumor also was picked up by the media.
Isn't that called your mom for deciding not to become a doctor?
Funny how the business gets all the sympathy, here. Meanwhile, the stockholders--i.e. all of us--get screwed if a fraudulent company doesn't get exposed.
If a company goes public, the public has every right to scrutinize it and ensure they're above board. Short sellers play a critical role in providing that kind of scrutiny.