Nikola CEO rebuttals short-seller's fraud allegations

Yahoo Finance's Brian Sozzi, Alexis Christoforous, and Ines Ferre break down the market action for Nikola.

Video Transcript

BRIAN SOZZI: Welcome back to "The First Trade." We're watching shares of Nikola today after short seller Hindenburg Research published an extensive report claiming that the electric vehicle maker is, quote, "an intricate fraud." CEO Trevor Milton took to Twitter to refute these claims. Ines, and I believe Milton just tweeted right now, correct?

INES FERRE: Yes, he did. He tweeted because Nikola came out with a statement. And Milton yesterday on Twitter had said he was going to come out with a line-by-line rebuttal to each of the allegations that this report had. And there are many allegations. I'll get to this tweet in just a second.

But basically, the allegations in this Hindenburg report say that the Nikola One, for example, it's hydrogen-powered truck, was never a running truck, that it didn't have a hydrogen fuel cell power train at all, that its key partners and backers, like Worthington and Bosch, had been cashing out aggressively. And Hindenburg says that it has recorded phone conversations, it has text messages, emails, and documents. It spoke to former employees. It also said that Nikola's partners, including, of course, GM that was just announced earlier this week, didn't do their homework, and that they're just desperate to catch up with Tesla.

Now, as I mentioned, Trevor Milton yesterday said that he was going to give a line-by-line rebuttal. The company released a statement this morning addressing the Hindenburg report, saying in part "to be clear, this was not a research report. And it is not accurate. This was a hit job for short-sale profit driven by greed. We have nothing to hide and we will refute these allegations."

The company says that it has retained a law firm to evaluate any potential legal recourse. And it will bring the actions of the short seller with documentation, with evidence to the SEC. And Trevor Milton is getting some pushback on Twitter also from people who were expecting him to come out with a more detailed response.

And he wrote just minutes ago, "everyone needs to know I'm pissed too. You know me. And normally I go straight at the BS and provide evidence, like I always have. I have nothing to hide, zero. Even the simple points, I can't comment on right now." He says that he's letting the SEC do their job first, Brian.

BRIAN SOZZI: All right, thanks so much, Ines.