Nikola stock is rising after the company reported a smaller-than-expected loss and provided an update on its legal problems.
The company said Thursday it is talking with the Securities and Exchange Commission about settling the agency’s investigation about allegations of false claims made by former CEO Trevor Milton.
The Justice Department is also investigating the company over the same allegations.
Nikola (ticker: NKLA) stock shot up 11% Thursday, while the Dow Jones Industrial Average has dipped 21.46 points, or 0.1%, while the S&P 500 has risen 0.4%.
Nikola reported an adjusted loss of 22 cents loss, better than the Wall Street consensus for a 26-cent loss. Nikola is still in start-up mode so it doesn’t have any sales, but it hopes to ramp those up in 2022. The company ended the quarter with about $587 million in cash on its balance sheet, down from about $633 million at the end of the second quarter.
Markets seem to be more focused on the SEC. “Nikola and the Staff of the Division of Enforcement at the SEC have been engaged in discussions regarding a resolution of the SEC’s investigation,” reads the company’s news release. The expected penalty is $125 million to be paid over time, the company said. Nikola also said it would seek “reimbursement from its founder, Trevor Milton, for costs and damages in connection with the government and regulatory investigations.”
Milton couldn’t be reached for comment. Nikola wasn’t immediately available to comment on its plans to seek reimbursement from Milton or the status of the Justice Department investigation.
Nikola’s regulatory woes stretch back to a short seller’s negative report published in September 2020. After reviewing the report, Nikola said its founder and former CEO Trevor Milton had made several statements that were “inaccurate in whole or in part.” The SEC and Justice Department started investigating shortly after the report was released.
Separately, Nikola reported that 25 of its electric heavy-duty trucks should be with customers by the end of 2021 and that testing of its hydrogen fuel cell truck was on schedule.
Nikola has had a volatile 12 months and Thursday’s update will only add to it. The stock was up 20% over the past three months through Thursday’s close but is still down about 67% from its 52-week high of almost $38, hit in November 2020.
Write to Al Root at [email protected]
