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New report claims widespread deception by Nikola Motor and founder Trevor Milton

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A new report claims that zero-emissions vehicle startup Nikola Motor has made a series of deceptive public statements and representations about its technology and business. Allegations include that Nikola staged a 2018 video of its signature hydrogen fuel-cell truck driving, and that it has made deceptive claims about its battery development efforts after the failure of an acquisition deal.

The allegations come from Hindenburg Research, which has a short position in Nikola stock. But they follow previous reports of misrepresentations by Nikola, and broader expert skepticism about the company’s aggressive claims.

The Hindenburg report’s most striking claim is that a January 2018 video purportedly showing a Nikola One hydrogen fuel-cell semi truck moving under its own power was staged. According to Hindenburg, the video in fact showed the truck rolling down a long, gentle slope. Hindenburg’s report includes a test confirming that the section of road shown in the video could accelerate a coasting vehicle to highway speeds, along with text messages from a former Nikola employee appearing to confirm the tactics.

Given these claims, it is notable that Nikola repeatedly described the video as showing the truck “in motion,” which would be technically true even if the truck were not moving under its own power. Bloomberg had previously reported that Nikola and its founder, Trevor Milton, made deceptive claims about the capabilities of the Nikola One unit displayed at a 2016 event.

Another major claim made in the Hindenburg report is that Nikola and Milton have misrepresented the company’s efforts to develop a new kind of battery for use in electric vehicles.

In November 2019, Milton claimed that Nikola would soon unveil “the biggest advancement we have seen in the battery world.” Those claims appear to have been based on the planned acquisition of a company called ZapGo, but by December, Nikola had backed out of that acquisition. In a March 2020 legal filing, Nikola said ZapGo “had nothing more than interesting research with no ability to commercialize its research.”

Despite pulling out of the deal, Nikola did not revise its public messaging about an impending revolution in EV battery technology. In a June interview with Fortune and in other public statements, Milton continued to promise an imminent unveiling of the tech. Milton claimed that Nikola was working to commercialize battery technology it had licensed from academic researchers, while declining to name those researchers. Experts evaluating Nikola’s battery claims were skeptical of the company’s aggressive timeline.

Further questions about Nikola’s prior battery claims were raised by a Tuesday announcement that Nikola would use battery technology licensed from General Motors in vehicles including its upcoming Badger pickup truck. That announcement caused both Nikola and GM stock to rise dramatically. On Thursday, the Hindenburg report appears to be driving both stocks back down, with Nikola off nearly 10% at press time, and GM down nearly 4%.

The Hindenburg report also makes a variety of other claims about deception by Nikola and Trevor Milton, including alleged misrepresentations by Milton about prior companies he founded and sold.

Nikola sent Fortune a brief statement in response to Hindenburg’s report: “Nikola has been vetted by some of the world’s most credible companies and investors. We are on a path to success and will not waver based on a report filled with misleading information attempting to manipulate our stock.”

Nikola did not address Fortune’s questions about Hindenburg’s specific claims, including questions about whether the truck shown in the 2018 video was moving under its own power, or who Nikola’s battery development partners were by summer 2020. On Twitter, Milton wrote that “It will take the rest of the day to address the one sided false claims, but I will put out a detail report to address it. In the meantime, troll on”.

Though its short position would allow it to benefit from negative stock moves, Hindenburg Research has built a strong reputation in recent years based on in-depth research into public misrepresentations and accounting irregularities at companies including Smile Direct Club, SC Worx, and Bloom Energy. Many of Hindenburg’s claims about those and other companies were subsequently confirmed by other reporting, by regulators, or by the companies themselves.

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Lyron Foster is a Hawaii based African American Musician, Author, Actor, Blogger, Filmmaker, Philanthropist and Multinational Serial Tech Entrepreneur.

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Trump approves TikTok deal involving Oracle, ending international standoff

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Donald Trump approved Oracle’s bid for the U.S. operations of TikTok “in concept,” a deal forced by the president’s orders last month declaring the popular video-sharing app a national security threat.

“I have given the deal my blessing. If they get it done that’s great. If they don’t, that’s OK too, ” Trump told reporters Saturday as he left the White House for a campaign rally in Fayetteville, N.C. “I approved the deal in concept.”

The new company, which will be called TikTok Global, has agreed to donate $5 billion to an education fund, which Trump said would satisfy his demand that the government receive a payment from the deal. “They’re going to be setting up a very large fund,” he said. “That’s their contribution that I’ve been asking for.”

Under terms of the deal, Oracle and Walmart will control 20% of the new TikTok Global, according to a person familiar with the matter. Sequoia Capital and General Atlantic, already investors in TikTok’s Chinese owner ByteDance, are also expected to take stakes in the new company, the person said.

TikTok said in a statement that it was “pleased that the proposal by TikTok, Oracle, and Walmart will resolve the security concerns of the U.S. administration and settle questions around TikTok’s future in the U.S.”

The company confirmed Oracle will host all its U.S. data and secure its computer systems. TikTok said it is working with Walmart on a commercial partnership and it, along with Oracle, will take part in a TikTok Global pre-IPO financing round in which they can take as much as a 20% cumulative stake in the company.

The deal was forced by a pair of bans Trump issued in August citing national concerns over TikTok’s Chinese ownership. The Commerce Department on Saturday delayed by a week a ban that would have forced Apple Inc. and Alphabet Inc.’s Google to pull the TikTok video app from their U.S. app stores on Sunday.

TikTok Global will likely be headquartered in Texas and will hire “at least” 25,000 people, Trump said. TikTok will need to hire thousands of content moderators, engineers, and marketing staff that were previously located in China and around the world.

To sweeten the deal for Trump, TikTok promised to hire an additional 15,000 jobs more than the 10,000 positions the company already pledged to fill earlier this year. It’s unclear if there’s a timeline to achieve that target, or any guarantees that it will follow through. Facebook Inc., the largest U.S. social media company, employed about 45,000 people in 2019, while Twitter Inc. employed only 4,900, according to data compiled by Bloomberg.

Trump is ramping up pressure on Chinese-owned apps in the weeks before the Nov. 3 presidential elections, citing national security concerns about the data U.S. citizens provide to them and the potential for Beijing to use them for spying. The president is trailing his opponent Joe Biden in polls and has sought to portray himself as tougher on Beijing than the Democrat.

While the Chinese government must now sign off on the transaction for it to go forward, as of earlier this week, ByteDance was growing increasingly confident that the proposal would pass muster with Chinese regulators, people familiar with the matter told Bloomberg.

Under the terms of the agreement reached early in the week, ByteDance would retain a majority of TikTok’s assets and control over the algorithm, with Oracle and other U.S. investors taking minority stakes.

Trump seemed to contradict that on Saturday. “It will have nothing to do with China, it’ll be totally secure, that’ll be part of the deal,” he said. “All of the control is Walmart and Oracle, two great American companies.”

Trump spoke with Oracle Chairman Larry Ellison and Walmart Chief Executive Officer Doug McMillon on Friday, telling them he still expected the U.S. government to receive a cash payment as part of the transaction, according to people familiar with the matter. They agreed to the educational donation as a way to satisfy Trump’s demand, one of the people said.

The new U.S. company intends to hold an initial public offering in about a year, according to people familiar with the matter. TikTok plans to use the proceeds from the listing for the $5 billion educational grant, one of the people said.

Oracle will get full access to review TikTok’s source code and updates to make sure there are no back doors used by the company’s Chinese parent to gather data or to spy on the video-sharing app’s 100 million American users, according to people familiar with the matter.

The deal came together last weekend, the result of high-level negotiations between ByteDance, Oracle and top Trump administration officials after ByteDance rejected a bid from Microsoft Corp. and Walmart to buy the U.S. TikTok service outright.

Beijing has signaled it would greenlight a deal as long as ByteDance doesn’t have to transfer the artificial intelligence algorithms that drive TikTok’s service, Bloomberg has reported.

The Treasury Department said the deal is subject to a security agreement that requires approval by the Committee on Foreign Investment in the U.S., or Cfius. The term sheet that’s been negotiated between Cfius and the companies will now have to be formalized in a document that details the mechanics for implementing the terms of the deal.

That document would likely include requirements related to the establishment of the new company, arrangements governing its relationship with ByteDance, whether an IPO is part of the deal, whether ByteDance will have to divest its entire stake in the IPO and what would happen if for some reason the IPO doesn’t occur, said Aimen Mir, a lawyer at Freshfields Bruckhaus Deringer LLP and a former deputy assistant secretary for investment security at Treasury.

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Trump Says He’s Approved Oracle Deal For U.S. TikTok

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Trump Says He’s Approved Oracle Deal For U.S. TikTok(Bloomberg) — Donald Trump said he’s approved Oracle Corp.’s bid for the U.S. operations of TikTok “in concept,” a deal forced by the president’s orders last month declaring the popular video-sharing app a national security threat.“I have given the deal my blessing. If they get it done that’s great. If they don’t, that’s OK too, ” Trump told reporters Saturday as he left the White House for a campaign rally in Fayetteville, N.C. “I approved the deal in concept.”The new company, which will be called TikTok Global, has agreed to donate $5 billion to an education fund, which Trump said would satisfy his demand that the government receive a payment from the deal.“They’re going to be setting up a very large fund,” Trump said. “That’s their contribution that I’ve been asking for.”TikTok Global will likely be headquartered in Texas and will hire “at least” 25,000 people, Trump said.That figure could not be immediately verified. Facebook Inc., the largest U.S. social media company, employed about 45,000 people in 2019, while Twitter Inc. employed only 4,900, according to data compiled by Bloomberg.The deal is the result of Trump’s orders last month over national security concerns about TikTok’s ownership by ByteDance Ltd., a Chinese company.The Chinese government must now sign off on the transaction for it to go forward.Trump is ramping up pressure on Chinese-owned apps in the weeks before the Nov. 3 presidential elections, citing national security concerns about the data U.S. citizens provide to them and the potential for Beijing to use them for spying. The president is trailing his opponent Joe Biden in polls and has sought to portray himself as tougher on Beijing than the Democrat.Under the terms of the agreement between the two companies, Bytedance retains a majority of TikTok’s assets and control over the algorithm, with Oracle and other U.S. investors taking minority stakes.“It will have nothing to do with China, it’ll be totally secure, that’ll be part of the deal,” Trump said. “All of the control is WalMart and Oracle, two great American companies.”Trump spoke with Oracle Chairman Larry Ellison and WalMart Inc. Chief Executive Officer Doug McMillon on Friday, telling them he still expected the U.S. government to receive a cash payment as part of the transction, according to people familiar with the matter.The new U.S. company intends to hold an initial public offering in about a year, according to people familiar with the matter.Oracle, Tiktok, and Walmart didn’t immediately respond to requests for comment.Oracle will get full access to review TikTok’s source code and updates to make sure there are no back doors used by the company’s Chinese parent to gather data or to spy on the video-sharing app’s 100 million American users, according to people familiar with the matter.The deal came together last weekend, the result of high-level negotiations between ByteDance, Oracle and top Trump administration officials after ByteDance rejected a bid from Microsoft Corp. and WalMart to buy the U.S. TikTok service outright.WalMart remains interested in investing in the deal and could land a board seat on the new company, according to one person familiar with the matter.Beijing has signaled it would greenlight a deal as long as ByteDance doesn’t have to transfer the artificial intelligence algorithms that drive TikTok’s service, Bloomberg has reported.(Updates with company comments in 14rh paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.


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4 Free Tips to Get Your Business to Show Up on Google Maps

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If your business profile isn’t complete, has inaccurate information and doesn’t have any photos of your business, you probably won’t show up.

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