The underlying problems of Nikola

Over the last few months, Nikola Motors has been the headline of news in the world. For some context, Nikola Motors was founded by Trevor Milton in 2014, with the aim of bringing zero-emissions vehicles to the market.

Nikola truck — the badger debuted on the middle of 2019

start-up aim to get a market share at the EV market and be a direct competitor to Tesla. Nikola’s founder, Trevor Milton, started the company with a vision to provide trucks that run on hydrogen.

Nikola’s rise was unprecedented. It opened its doors to public investors on June 4th of 2018. Stock prices stayed stagnant throughout the fiscal years of 2018- the end of 2019, while rising at an unprecedented rate at 2020. Nikola’s founder Trevor Milton, started the company with a vision to provide elec

What made Nikola interesting is how the general public still believes it to be a legitimate company to this day. As a company, your main factors are sales of your products. Higher valuation companies relies on 2 sets of metrics, organic growth or acquisitions. Nikola does not have both, but has a partnership with GM which cause it’s shares prices to soar when the news broke up.

Major shake up in Nikola’s shares appeared when short seller firm, Hindenburg Research released a report on Twitter, detailing the evidence and fraud that is perpetrated by Trevor Milton. A video published on Youtube by Nikola, showcased the badger rolling down a hill, with Hindenburg Research exposed that the truck was just being propelled by the force of gravity and no onboard propulsion. 2 days after, Nikola’s stock has fallen by 36%.

The underlying problems in Nikola isn’t the fraud or deception by the entire Nikola team, but with how the general public is still believing in the future of Nikola, despite never having been able to reveal to the general public a working functioning motor vehicle, let alone one that is powered by hydrogen. Right now, Nikola still stands at a valuation of $7 Billion, not a small feat valuation by any chance.