Nikol-ess?

The strange title of this post is a cross reference to my post/rant entitled ‘Emporer’s New Clothes’ in June 2020.

This is about Nikola, the start up electic vehicle business into which GM invested a calculated 2 BILLION dollars, according to media reports.

By September 10th a major documented report (67 pages of it) was published by a researcher and market shorter called Hindenburg – look at hindenburgresearch.com – claiming Nikola’s founder Tevor Milton and associates were lying in their teeth. The founder had already built a track record of dubious dealing and misrepresentation and his brother, the named director of hydrogen technology, is reported to be well qualified in pouring concrete and maybe projecting fantasies but not as a hydrogen fuel scientist.

The up and running hydrogen powered trucks for which so many orders were claimed to have been placed (the same orders more than once) were of course fakes. This much had already been suggested by Bloomberg. Nikola’s first effort (in 2016) at a hydrogen truck was actually powered by gas, but CNG, not hydrogen. Natural gas powered buses are of course already in widespread use.

In the chaos that resulted GM appointed a new chairman (the guy who did the investment deal). They are still involved, but with probably not much money or even time really spent and they may have acquired a potential research facility. They probably got good publicity from the coverage of the ‘investment’ and there has not been much general publicity about the Hindeburg report and its consequences.

The quoted 2 billion investment was based on the supposed valuation of the Nikola business, not an actual amount of money spent.

The fuller story presented by Hindenburg is an entertaining story by itself if you are interested in the not uncommon blatant corporate deceit that pops up in the US in particular but also in the UK; those of you with Hampshire connections may recall a major IT con being perpetrated on the Wessex Regional Health Authority by a newly formed business.

The nugget of human behaviour that I collected from this tale was the willingness of people who should know better to take as fact presentations that are quite plainly suspicious or even obvious lies. They do this because they are ‘primed’ to do so and to act sceptical would risk opprobrium from their fellow humans.

Much as the Andersen tale warns. Good sense has always been around if you looked for it. Companies that never make profits and maybe not even any products are NOT worth a cent in reality. But plenty of money may get made trading their shares on fantasy valuations before the small child (or market shorting specialist) blurts out the truth.