Shares of electric vehicle start-up Nikola Corp.declined 8% in after-hours trading on Tuesday after company’s CEO Mark Russell unbale to provide assured to investors that the GM will not step back from the $2 billion deal with Nikola. Russell also confirmed that the discussions are ongoing on with the G.M if a deal is not finalized by December 3 either side can walk away.
Russell also refused to make any comments about the ex-chairman, Milton who stepped down in September and own 85.6 million shares making Milton Nikola’s largest single shareholder.Russell said that the company will continue to reward our long-term focus shareholders.According to the Nikola, all those shares will be eligible to sell next week.
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The Department of Justice and Securities and Exchange Commission started investigating allegations of fraud raised by short-seller Hindenburg in September and due to this Milton has to step down.
Milton was accused by Hindenburg for making false statements about Nikola’s technology to grow the company and partner with other auto companies. The shocking report from Hindenburgwas released two days after the company announced a deal with GM that sent both companies’ shares soaring in September.
The shareowners agreed to extend their lock-up until April 31, including 39.8 million shares held by a separate company own by Milton and controlled by Russell.
Nikola shares jumped 17.3% on Tuesday and closed at $34.50 and continue going up since company went public on June 4 after a reverse merger with VectoIQ.