By
Steve Muchoki
October 25th, 2023
When the $2 billion deal with GM was announced, Nikola said it expected to close it before September 30. However, the companies have not managed to finalize the agreement.
Shares of electric components, drivetrains, and vehicle producer Nikola Corporation (NASDAQ: NKLA) significantly dropped on Tuesday. Nikola stock closed 7.36% down, at $17.88 per share. However, after hours, it slightly rebounded by 3.41% to $18.49. The market cap is $7.31 billion, year-to-date, Nikola shares are 73.26% up. The plunge Nikola stock saw yesterday resulted from the sex abuse accusation of Nikola founder Trevor Milton and the company’s doubtful negotiations with General Motors Company (NYSE: GM). Let us have a closer look at the events.
Sexual-Assault Allegations against Trevor Milton
September became fateful for Nikola founder Trevor Milton. After Nikola suffered fraud accusations from short-selling firm Hindenburg Research, Milton decided to step down as a chairman. Then, two women accused Milton of sexual abuse. One of them used to be Milton’s work assistant. According to her lawyer Craig Johnson, the alleged attack took place took place back in 2004 in Utah, when she was 15-years-old, Milton was 22.
Johnson said:
“The allegation by my client is that he digitally penetrated her vagina with his fingers, which under Utah law constitutes object rape, and that is the charge the police will be investigating, in addition to forcible sexual abuse, which includes any ancillary touching of the vagina during the assault.”
Another woman said she was Milton’s cousin and she was also 15 when he groped her at a funeral for their grandfather.
However, Milton’s representative denied the allegations. He said:
“Mr. Milton strongly denies these false allegations. At no point in his life has Mr. Milton ever engaged in any inappropriate physical contact with anyone.”
A spokesperson for Nikola did not immediately respond to a request for comment about the assault allegations against Milton.
Partnership Deal with GM
Earlier this month, Nikola entered in partnership with automobile giant General Motors to build its Badger electric pickup trucks. When the $2 billion deal was announced, Nikola said it expected it to close before September 30. However, the companies have not managed to finalize the agreement.
GM spokeswoman Juli Huston-Rough commented:
“Our transaction with Nikola has not closed. We are continuing our discussions with Nikola and will provide further updates when appropriate or required.”
General Motors added:
“We will work with Nikola to close the transaction. Our overall goal is to put everyone in an EV and accelerate adoption.”
Within the deal, GM would receive an 11% stake in Nikola and payments up to $700 million for building the startup’s Badger pickup. In return, GM agreed to supply Nikola with electric batteries, chassis architecture, and a factory to build the Badger pickup, as well as GM’s fuel cell system for Nikola’s planned heavy trucks.
