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12,266.41
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*Stock data as of market close, cryptocurrency data as of 11:00pm ET. Here's what these numbers mean. -
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+ S&P
+4,110.41
+
- Stefan Puchner/Getty Images
- The fraud trial of Trevor Milton, the founder and former CEO of electric truck company Nikola Motors, began yesterday with jury selection. Milton, who pleaded not guilty in the case, stands accused of lying about his company’s progress in developing electric vehicles, leading to huge losses for investors.
-The case—a shoo-in for Hulu’s next ripped-from-the-headlines original that everyone at work except you is watching—is seen as a cautionary tale of buying into the hype around companies before they deliver a single product.
-So how did Nikola go from the third-largest auto company in the US in 2020 with a $33 billion market value to just a $2.3 billion market value as of yesterday with an indicted founder?
-Milton founded Nikola in 2015, capitalizing on investor fervor around EVs, particularly those made by Elon Musk’s Tesla. In June 2020, the company went public via a SPAC. Prosecutors claim that Milton misled investors by making false claims about Nikola’s ability to produce hydrogen and by releasing a now-infamous promotional video that showed a moving Nikola truck (not disclosed: the truck was merely rolling downhill in neutral).
-Beyond simply drumming up name association with retail investor darling Tesla, Milton also deliberately targeted less knowledgeable investors by promoting Nikola’s stock on social media and in interviews, prosecutors allege.
-And those retail investors ultimately bore the brunt of Nikola’s losses when its stock dropped 40% following Milton’s resignation in September 2020, days after an activist short seller published a scathing report calling the company an “intricate fraud built on dozens of lies.”
-In December, Nikola agreed to pay a $125 million penalty to settle an SEC fraud investigation. The company, which is still around and has begun production on a battery-powered semi-truck model, reported a net loss of $173 million in the second quarter.
-Before stepping down, Milton purchased a $32.5 million Utah ranch and a jet, and since his resignation, he has sold more than $300 million in company stock. The main charge against him carries a maximum sentence of 25 years, though he’s likely to see much less time, if he’s even convicted.—MK
-
+ Dow
+32,381.34
+
+ 10-Year
+3.358%
+
+ Bitcoin
+$22,311.05
+
+ Apple
+$163.43
+*Stock data as of market close, cryptocurrency data as of 11:00pm ET. Here's what these numbers mean. +
+
+Stefan Puchner/Getty Images
+The fraud trial of Trevor Milton, the founder and former CEO of electric truck company Nikola Motors, began yesterday with jury selection. Milton, who pleaded not guilty in the case, stands accused of lying about his company’s progress in developing electric vehicles, leading to huge losses for investors.
+The case—a shoo-in for Hulu’s next ripped-from-the-headlines original that everyone at work except you is watching—is seen as a cautionary tale of buying into the hype around companies before they deliver a single product.
+So how did Nikola go from the third-largest auto company in the US in 2020 with a $33 billion market value to just a $2.3 billion market value as of yesterday with an indicted founder?
+Milton founded Nikola in 2015, capitalizing on investor fervor around EVs, particularly those made by Elon Musk’s Tesla. In June 2020, the company went public via a SPAC. Prosecutors claim that Milton misled investors by making false claims about Nikola’s ability to produce hydrogen and by releasing a now-infamous promotional video that showed a moving Nikola truck (not disclosed: the truck was merely rolling downhill in neutral).
+Beyond simply drumming up name association with retail investor darling Tesla, Milton also deliberately targeted less knowledgeable investors by promoting Nikola’s stock on social media and in interviews, prosecutors allege.
+And those retail investors ultimately bore the brunt of Nikola’s losses when its stock dropped 40% following Milton’s resignation in September 2020, days after an activist short seller published a scathing report calling the company an “intricate fraud built on dozens of lies.”
+In December, Nikola agreed to pay a $125 million penalty to settle an SEC fraud investigation. The company, which is still around and has begun production on a battery-powered semi-truck model, reported a net loss of $173 million in the second quarter.
+Before stepping down, Milton purchased a $32.5 million Utah ranch and a jet, and since his resignation, he has sold more than $300 million in company stock. The main charge against him carries a maximum sentence of 25 years, though he’s likely to see much less time, if he’s even convicted.—MK
+