Trevor Milton, Former CEO of Nikola, Fooled Investors and Now Stands Trial to Pay the Price

By Spencer Hulse Spencer Hulse has been verified by Muck Rack's editorial team
Published on September 21, 2022

Sometimes, all it takes is a powerful vision to pull people in and gain momentum. That was the case for Nikola, a maker of electric trucks. The company received massive investments from people excited about what was to come, all fueled by exaggeration and hype. Now, the former CEO and founder, Trevor Milton, is standing trial on federal charges.

The charges include wire and securities fraud due to him allegedly misleading investors about the company’s capabilities. Specifically, Milton is accused of exaggerating the company’s technology, which caused investors to lose a significant amount of money when it collapsed.

Jury selection for the trial began last week in U.S. District Court in Manhattan, with Trevor Milton pleading not guilty.

To put the exaggeration and hype in perspective, Nikola found itself worth more than Ford on the stock market for a brief period in 2020. People thought of it as the Tesla of the trucking industry, and that was all without the company generating sales or products.

Everything crumbled when reports appeared detailing Milton’s false claims about the company’s technology. The evidence included a video where a truck was rolled down an incline to give the illusion of a working prototype.

The reports that revealed Milton’s exaggerations ended with the drop in stock prices and his resignation. However, while the company did take a major hit to both reputation and share price, it continued to operate. In fact, it has finally started to produce a battery-powered truck known as the Tre.

But the damage was already done to Nikola. The company reported a net loss of $173 million on sales of $18 million over three months. It also paid $125 million last year to settle a fraud investigation launched by the SEC. And perhaps most shockingly, the company’s stock prices fell from its high of around $66 in 2020 to under $5.

Nikola was not the only thing to suffer, though. Prosecutors believe that Trevor Milton deliberately attempted to attract small-scale investors without as much knowledge of what they were getting into using interviews and social media. So, when the stock prices dropped, the small investors took the greatest hit.

Everything Milton did and said about Nikola and its technology seems to have been muddied with the intent to deceive. Further proof are his blatant lies about having a fully functional truck as far back as 2016. Back then, the vehicle lacked gears or a motor, so it certainly did not function. The same gore for the aforementioned video showing a truck rolling down a hill to mislead people.

And the lies did not stop there. Milton repeatedly marketed features and projects that did not exist. A notable instance involves a network of hydrogen fueling stations for trucks powered by fuel cells. While perhaps something Nikola planned to build, Milton claimed the company had already constructed such stations.

However, according to the indictment, “Nikola had never obtained a permit for, let alone constructed, a hydrogen production station, nor had it produced any hydrogen.”

Despite Milton’s fondness for exaggeration, not everyone suffered. Unlike the small-scale investors, some of those with a better understanding and complete access to information managed to get out in time, reaping a hefty profit. Perhaps the better question is how investors such as GM missed the truth since so many aspects of the business turned out to be complete fabrications.

By Spencer Hulse Spencer Hulse has been verified by Muck Rack's editorial team

Spencer Hulse is the Editorial Director at Grit Daily. He is responsible for overseeing other editors and writers, day-to-day operations, and covering breaking news.

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