Case 1:20-cv-04354 Document 1 Filed 09/16/20 Page 1 of 29 PageID #: 1
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`UNITED STATES DISTRICT COURT
`EASTERN DISTRICT OF NEW YORK
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`ARAB SALEM, Individually and On
`Behalf of All Others Similarly Situated,
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`Plaintiff,
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`Case No.
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`CLASS ACTION COMPLAINT
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`JURY TRIAL DEMANDED
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`NIKOLA CORPORATION, TREVOR R.
`MILTON, MARK A. RUSSELL, and KIM
`J. BRADY,
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`v.
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`Defendants.
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`Case 1:20-cv-04354 Document 1 Filed 09/16/20 Page 2 of 29 PageID #: 2
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`Plaintiff Arab Salem (“Plaintiff”), individually and on behalf of all other persons similarly
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`situated, by Plaintiff’s undersigned attorneys, for Plaintiff’s complaint against Defendants, alleges
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`the following based upon personal knowledge as to Plaintiff and Plaintiff’s own acts, and
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`information and belief as to all other matters, based upon, inter alia, the investigation conducted
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`by and through Plaintiff’s attorneys, which included, among other things, a review of the
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`Defendants’ public documents, conference calls and announcements made by Defendants, United
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`States (“U.S.”) Securities and Exchange Commission (“SEC”) filings, wire and press releases
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`published by and regarding Nikola Corporation (“Nikola” or the “Company”), analysts’ reports
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`and advisories about the Company, and information readily obtainable on the Internet. Plaintiff
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`believes that substantial evidentiary support will exist for the allegations set forth herein after a
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`reasonable opportunity for discovery.
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`NATURE OF THE ACTION
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`1.
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`This is a federal securities class action on behalf of a class consisting of all persons
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`other than Defendants who purchased or otherwise acquired Nikola securities between June 4,
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`2020 and September 9, 2020, both dates inclusive (the “Class Period”), seeking to recover damages
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`caused by Defendants’ violations of the federal securities laws and to pursue remedies under
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`Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the “Exchange Act”) and Rule
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`10b-5 promulgated thereunder, against the Company and certain of its top officials.
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`2.
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`Nikola purports to operate as an integrated zero-emissions transportation systems
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`provider. The Company purports to design and manufacture battery-electric and hydrogen-electric
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`vehicles, electric vehicle drivetrains, vehicle components, energy storage systems, and hydrogen
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`fueling station infrastructure. The Company also purports to develop electric vehicle solutions for
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`military and outdoor recreational applications. Nikola was founded in 2015 by Defendant Trevor
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`2
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`Case 1:20-cv-04354 Document 1 Filed 09/16/20 Page 3 of 29 PageID #: 3
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`Milton (“Milton”), and in June 2020, the Company’s securities began trading publicly after the
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`execution of a reverse merger with VectoIQ Acquisition Corp.
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`3.
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`Throughout the Class Period, Defendants made materially false and misleading
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`statements regarding the Company’s business, operational and compliance policies. Specifically,
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`Defendants made false and/or misleading statements and/or failed to disclose that: (i) Defendant
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`Milton had repeatedly misrepresented and/or exaggerated Nikola’s financial, technological, and
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`operational profile; (ii) the foregoing misrepresentations were intended to, and did, present a
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`materially false image of the Company’s growth and success, thereby artificially inflating the
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`Company’s stock price; (iii) the foregoing misrepresentations were foreseeably likely to subject
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`the Company to enhanced regulatory scrutiny and/or enforcement, along with reputational harm
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`when the truth came to light; and (iv) as a result, the Company’s public statements were materially
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`false and misleading at all relevant times.
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`4.
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`On September 10, 2020, Hindenburg Research (“Hindenburg”) published a report
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`entitled, “Nikola: How to Parlay An Ocean of Lies Into a Partnership With the Largest Auto OEM
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`in America” (the “Hindenburg Report” or the “Report”). Asserting that it had gathered “extensive
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`evidence—including recorded phone calls, text messages, private emails and behind-the-scenes
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`photographs,” Hindenburg represented that it had identified “dozens of false statements by”
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`Milton, which had led Hindenburg to conclude that Nikola “is an intricate fraud built on dozen of
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`lies over the course of . . . Milton’s career.” Defendant Milton made these misrepresentations, the
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`Report asserted, to substantially grow the Company and secure partnerships with top auto
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`companies.
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`5.
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`On this news, Nikola’s stock price fell $4.80 per share, or 11.33%, to close at
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`$37.57 per share on September 10, 2020.
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`3
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`6.
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`Then, on September 14, 2020, after the market had closed, Bloomberg reported that
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`the SEC was investigating Nikola to assess the merits of the Hindenburg Report.
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`7.
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`Finally, on September 15, 2020, during intra-day trading, the Wall Street Journal
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`reported that the United States Department of Justice (“DOJ”) had joined the SEC’s investigation
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`of Nikola.
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`8.
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`On this news, Nikola’s stock fell an additional $0.17 per share during intra-day
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`trading, to close at $32.83 on September 15, 2020, an 8.27% decline from its previous close on
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`September 14, 2020.
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`9.
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`As a result of Defendants’ wrongful acts and omissions, and the precipitous decline
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`in the market value of the Company’s securities, Plaintiff and other Class members have suffered
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`significant losses and damages.
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`JURISDICTION AND VENUE
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`10.
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`The claims asserted herein arise under and pursuant to Sections 10(b) and 20(a) of
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`the Exchange Act (15 U.S.C. §§ 78j(b) and 78t(a)) and Rule 10b-5 promulgated thereunder by the
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`SEC (17 C.F.R. § 240.10b-5).
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`11.
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`This Court has jurisdiction over the subject matter of this action pursuant to 28
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`U.S.C. § 1331 and Section 27 of the Exchange Act.
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`12.
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`Venue is proper in this Judicial District pursuant to Section 27 of the Exchange Act
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`(15 U.S.C. § 78aa) and 28 U.S.C. § 1391(b), as the alleged misstatements entered and the
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`subsequent damages took place in this Judicial District. Pursuant to Nikola’s most recent quarterly
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`report on Form 10-Q, as of July 30, 2020, there were 378,980,941 shares of the Company’s
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`common stock outstanding. Nikola’s common stock trades on the Nasdaq Stock Market
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`(“NASDAQ”). Accordingly, there are presumably hundreds, if not thousands, of investors in
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`4
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`Nikola’s common stock located within the U.S., some of whom undoubtedly reside in this Judicial
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`District.
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`13.
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`In connection with the acts alleged in this complaint, Defendants, directly or
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`indirectly, used the means and instrumentalities of interstate commerce, including, but not limited
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`to, the mails, interstate telephone communications, and the facilities of the national securities
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`markets.
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`PARTIES
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`14.
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`Plaintiff, as set forth in the attached Certification, acquired Nikola securities at
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`artificially inflated prices during the Class Period and was damaged upon the revelations of the
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`Company’s alleged fraud.
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`15.
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`Defendant Nikola is a Delaware corporation with principal executive offices
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`located in Phoenix, Arizona. The Company purports to operate as an integrated zero-emissions
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`transportation systems provider. Nikola’s common stock trades on the NASDAQ under the ticker
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`symbol “NKLA.”
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`16.
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`Defendant Milton is Nikola’s founder and has served as the Company’s Executive
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`Chairman at all relevant times.
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`17.
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`Defendant Mark A. Russell (“Russell”) has served as Nikola’s President and CEO
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`at all relevant times.
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`18.
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`Defendant Kim J. Brady (“Brady”) has served as Nikola’s Chief Financial Officer
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`at all relevant times.
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`19.
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`Defendants Milton, Russell, and Brady are sometimes referred to herein as the
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`“Individual Defendants.”
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`5
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`20.
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`The Individual Defendants possessed the power and authority to control the
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`contents of Nikola’s SEC filings, press releases, and other market communications. The Individual
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`Defendants were provided with copies of Nikola’s SEC filings and press releases alleged herein
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`to be misleading prior to or shortly after their issuance and had the ability and opportunity to
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`prevent their issuance or to cause them to be corrected. Because of their positions with Nikola,
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`and their access to material information available to them but not to the public, the Individual
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`Defendants knew that the adverse facts specified herein had not been disclosed to and were being
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`concealed from the public, and that the positive representations being made were then materially
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`false and misleading. The Individual Defendants are liable for the false statements and omissions
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`pleaded herein.
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`21.
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`Nikola and the Individual Defendants are collectively referred to herein as
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`“Defendants.”
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`SUBSTANTIVE ALLEGATIONS
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`Background
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`22.
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`Nikola purports to operate as an integrated zero-emissions transportation systems
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`provider. The Company purports to design and manufacture battery-electric and hydrogen-electric
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`vehicles, electric vehicle drivetrains, vehicle components, energy storage systems, and hydrogen
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`fueling station infrastructure. The Company also purports to develop electric vehicle solutions for
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`military and outdoor recreational applications. Nikola was founded in 2015 by Defendant Milton,
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`and in June 2020, the Company’s securities began trading publicly after the execution of a reverse
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`merger with VectoIQ Acquisition Corp.
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`6
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`Materially False and Misleading Statements Issued During the Class Period
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`23.
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`The Class Period begins on June 4, 2020, the day after Nikola issued a press release
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`announcing that the Company had closed its business combination with VectoIQ and that the
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`Company would begin publicly trading on the NASDAQ the following day. The press release
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`stated, in relevant part:
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`The business combination . . . further solidifies Nikola as a global leader in zero-
`emissions transportation and infrastructure solutions. On June 4, 2020, the
`combined company’s shares will trade on the Nasdaq under the new ticker symbol
`“NKLA.”
`
`
`***
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`“Nikola is thrilled to complete the Nasdaq listing and be part of the ESG investment
`world. This is a significant endorsement in fuel-cell and battery-electric technology.
`Since Nikola launched its first fuel-cell semi-truck, you have seen the world rally
`behind hydrogen and follow our lead. What was once considered the fuel of the
`future is now accepted as today’s solution,” said Nikola’s Founder and Executive
`Chairman Trevor Milton. “With our Nikola IVECO joint venture and over $10
`billion in pre-order reservations, Nikola is positioned to be a wonderful story of
`how one company can literally change the world.”
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`24.
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`On July 17, 2020, Nikola filed a prospectus on Form 424B3 with the SEC (the “July
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`17, 2020 Prospectus”). In providing an overview of the Company, the July 17, 2020 Prospectus
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`touted, in relevant part:
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`We are a vertically integrated zero-emissions transportation solution
`provider that designs and manufactures state-of-the-art battery-electric and
`hydrogen fuel cell electric vehicles, electric vehicle drivetrains, energy storage
`systems, and hydrogen fueling stations. Our core product offering is centered
`around our battery-electric vehicle (“BEV”) and hydrogen fuel cell electric vehicle
`(“FCEV”) Class 8 semi-trucks. The key differentiator of our business model is our
`planned network of hydrogen fueling stations. We are offering a revolutionary
`bundled lease model, which provides customers with the FCEV truck, hydrogen
`fuel, and maintenance for a fixed price per mile, locks in fuel demand and
`significantly de-risks infrastructure development.
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`(Emphasis added.)
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`7
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`25.
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`Further, the July 17, 2020 Prospectus touted the Company’s purported performance
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`in its three business units, stating, in relevant part:
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`The Truck business unit is developing and commercializing battery-electric vehicle
`(“BEV”) and hydrogen fuel cell electric vehicle (“FCEV”) class 8 trucks that
`provide environmentally friendly, cost-effective solutions to the short haul and
`long-haul trucking sector. The Energy business unit is developing and constructing
`a network of hydrogen fueling stations to meet hydrogen fuel demand for FCEV
`customers. The Powersports business unit is developing electric vehicle solutions
`for military and outdoor recreational applications.
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`26.
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`In addition, in a section entitled, “Who We Are,” the July 17, 2020 Prospectus
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`touted, in relevant part:
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`Nikola’s vision is to be the zero-emissions transportation industry leader.
`We plan to realize this vision through world-class partnerships, groundbreaking
`R&D, and a revolutionary business model.
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`
`***
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`We believe our station network will provide a competitive advantage and
`help accelerate the adoption of our FCEVs. We believe our product portfolio and
`hydrogen fueling network provides a key strategic advantage that differentiates
`Nikola from competitors and will allow us to disrupt the estimated $600 billion
`global heavy-duty commercial vehicle and the related fueling and maintenance
`ecosystems.
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`27.
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`Next, in providing an overview of the Company’s total addressable market, the July
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`17, 2020 Prospectus stated, in relevant part, “Nikola’s unique bundled lease which includes the
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`FCEV truck, fuel, and maintenance, will allow us to expand our total addressable market
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`significantly when compared to traditional OEMs[,]” and that, “[g]lobally, the total addressable
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`market (“TAM”), is estimated to be a $600 billion per-year with steady growth expected to
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`continue as e-commerce and global economic growth fuel the need for more heavy-duty trucks.”
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`28.
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`The July 17, 2020 Prospectus also included a discussion of the Company’s
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`products, touting, in relevant part:
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`8
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`As the commercial transportation sector transitions towards zero-emission
`solutions, we believe there will be a need to offer tailored solutions that meet the
`needs of each customer. Unlike the passenger vehicle market, where users typically
`return home each day, the commercial vehicle market contains multiple use cases
`often requiring vehicles to be out on the road for days, or weeks at a time. By
`offering both BEVs (for short-haul) and FCEVs (for medium- and long-haul), we
`believe Nikola is uniquely positioned to disrupt the commercial transportation
`sector by providing solutions that address the full range of customer needs.
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`***
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`We have developed an extensive portfolio of proprietary technologies that
`are embedded and integrated in our highly specialized BEV and FCEV zero-
`emission vehicles. In addition, we plan to leverage our zero-emission powertrain
`expertise to address transportation adjacencies as exemplified with our Powersports
`product offerings.
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`Our management team is primarily focused on the core semi-truck and
`hydrogen station programs. However, we believe that we can leverage our zero-
`emission powertrain expertise
`to address
`transportation adjacencies. Our
`Powersports product offerings provide significant benefits to our core semi-truck
`and hydrogen station programs, including branding halo, driving awareness of
`Nikola and our industry-defining technology, and R&D synergies on electric
`drivetrain, battery technology, and other core components.
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`***
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`***
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`
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`In addition to building heavy-duty zero-emission trucks, Nikola is also
`developing fueling and charging stations in North America and Europe to support
`our FCEV fleet customers and to help capture first mover advantage with respect
`to next generation fueling infrastructure. Over the next 8 to 10 years, Nikola intends
`to collaborate with strategic partners to build up to 700 fueling and charging stations
`in North America and approximately 70 fueling and charging stations in Europe.
`
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`***
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`
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`Nikola’s bundled lease includes maintenance for its vehicles. Service and
`maintenance of an electric vehicle is expected to be lower than the traditional ICE
`vehicle which has been proven in the electric passenger vehicle market. Fewer parts
`and considerably reduced complexity of the key drivetrain components should
`result in fewer breakdowns and less preventive maintenance, leading to better
`uptime and lower maintenance cost to operators. Reduced downtime could also lead
`to increased revenue for fleets as asset productivity increases.
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`9
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`***
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`A key requirement for our fleet customers is knowing there is an available
`service infrastructure for the maintenance and repair of our vehicles. Nikola is
`building a strong network of providers, a robust preventive maintenance program,
`as well as several levels of service depending on the complexity and type of
`maintenance required.
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`Nikola’s plans with respect to the service and maintenance of its vehicles is
`expected to include the following:
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`• Electric vehicles have a system of sensors and controls that allow for precise
`monitoring of the vehicle and component operation performance. We will
`use this data to provide smart predictive maintenance, which will decrease
`downtime and costs by identifying a potential problem before it results in a
`breakdown.
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`• Nikola will have the ability to provide over the air updates and software
`fixes when the vehicle is stopped. This can significantly reduce the time for
`repair and improve uptime.
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`•
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`•
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`•
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`29.
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`In cases where a customer has their own maintenance infrastructure, we will
`identify and provide procedures for items that can be maintained at their
`shops. This could include procedures such as tire changes, wiper and
`windshield repair and brake servicing.
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`In cases where the customer does not have a maintenance infrastructure or
`for more complex items, Nikola is leveraging its exclusive partner
`Thompson Caterpillar for maintenance and warranty work. Customers will
`have access to an already established network of 800 service stations as well
`as the ability to deploy a mobile service model. We will also support our
`partners with technologies like augmented reality and web-enabled video to
`support technicians for very complex tasks or newly identified issues.
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`If a vehicle requires maintenance of a complex system such as the fuel cell
`or battery, some of those items can be swapped or replaced with relative
`ease. This allows us to repair the downed component in the background and
`minimize vehicle downtime. We are also planning to develop a network of
`trained technicians that can travel to a customer or service partner site as
`necessary.
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`Finally, with respect to partnerships and suppliers, the July 17, 2020 Prospectus
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`stated, in relevant part:
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`10
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`Nikola’s vision will be realized through a revolutionary business model,
`groundbreaking R&D, disciplined execution, and world-class partnerships. Our
`business model is validated and supported by world-class strategic partnerships that
`significantly reduce execution risk, improve commercialization timeline, and
`provide a long-term competitive advantage. These world-class partners have
`accelerated our internal development, growth, and learning and have positioned us
`to revolutionize the transportation sector. We believe our partnerships help increase
`the depth and breadth of our competitive advantage as well.
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`Our partnership philosophy is a recognition that the world’s toughest
`challenges require bold solutions and a collaborative effort from multiple parties.
`Our goal is to provide zero-emission solutions to the transportation sector and to
`usher in next-generation grid solutions. With the help of our partners, we believe
`our chances of success are greatly improved. At Nikola, we are inspired by the
`knowledge that if we are successful, the whole world wins.
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`30.
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`On July 27, 2020, Nikola filed a prospectus on Form 424B3 with the SEC (the “July
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`27, 2020 Prospectus”). The July 27, 2020 Prospectus contained substantively similar statements
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`as those contained in the July 17, 2020 Prospectus, discussed above in ¶¶ 24-29.
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`31.
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`On August 4, 2020, Nikola filed a Quarterly Report on Form 10-Q with the SEC,
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`reporting the Company’s financial and operating results for the quarter ended June 30, 2020 (the
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`“Q2 2020 10-Q”). In providing an overview of the Company, the Q2 2020 10-Q stated, in relevant
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`part:
`
`We are a vertically integrated zero emissions transportation systems
`provider that designs and manufactures state of the art battery electric and hydrogen
`electric vehicles, electric vehicle drivetrains, energy storage systems, and hydrogen
`fueling stations. To date, we have been primarily focused on delivering zero
`emission Class 8 trucks to the commercial transportation sector in the U.S. and in
`Europe. Our core product offering includes battery electric and hydrogen fuel cell
`electric trucks and hydrogen fuel.
`
`
`We operate in three business units: Truck, Energy and Powersports. The
`Truck business unit is developing and commercializing BEV and FCEV Class 8
`trucks that provide environmentally friendly, cost effective solutions to the short
`haul and long haul trucking sector. The Energy business unit is developing and
`constructing a network of hydrogen fueling stations to meet hydrogen fuel demand
`for our FCEV customers. The Powersports business unit is developing electric
`vehicle solutions for military and outdoor recreational applications.
`
`
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`11
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`stated:
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`32.
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`Further, with respect to the Company’s controls and procedures, the Q2 2020 10-Q
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`Evaluation of Disclosure Controls and Procedures
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`We maintain a system of disclosure controls and procedures (as defined in
`Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the
`“Exchange Act”) designed to ensure that the information required to be disclosed
`by us in the reports that we file or submit under the Exchange Act is recorded,
`processed, summarized and reported within the time periods specified in the rules
`and forms of the Securities and Exchange Commission, and is accumulated and
`communicated to our management, including our Chief Executive Officer (our
`principal executive officer) and Chief Financial Officer (our principal financial
`officer), as appropriate, to allow timely decisions regarding required disclosure.
`
`
`Our management, with the participation of our Chief Executive Officer and
`our Chief Financial Officer, has evaluated the effectiveness of our disclosure
`controls and procedures under the Exchange Act as of June 30, 2020, the end of the
`period covered by this Quarterly Report on Form 10-Q. Based on such evaluation,
`our Chief Executive Officer and our Chief Financial Officer have concluded that,
`as of such date, our disclosure controls and procedures were effective.
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`Changes in Internal Control over Financial Reporting
`
`
`There were no changes in our internal control over financial reporting, as
`identified in connection with the evaluation required by Rule 13a-15(d) and Rule
`15d-15(d) of the Exchange Act, that occurred during the three months ended June
`30, 2020 that have materially affected, or are reasonably likely to materially affect,
`our internal control over financial reporting.
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`33.
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`Appended to the Q2 2020 10-Q as exhibits were signed certifications pursuant to
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`the Sarbanes-Oxley Act of 2002 (“SOX”) by Defendants Russell and Brady, attesting that “[t]he
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`information contained in the [Q2 2020 10-Q] fairly presents, in all material respects, the financial
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`condition and results of operations of the Company as of and for the period covered by the [Q2
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`2020 10-Q].”
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`34.
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`That same day, Nikola hosted an earnings call with investors and analysts to discuss
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`the Company’s financial and operating results for the second quarter of 2020. During the call,
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`12
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`Defendant Russell touted the purported operational performance of the Company, stating, in
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`relevant part:
`
`Nikola is a vertically integrated zero emissions transportation systems provider. We
`design and manufacture battery electric and hydrogen fuel cell electric vehicles
`along with the battery charging systems and hydrogen fueling stations to power
`them. Our core global offering centers on heavy commercial trucks. Our long haul
`commercial transport solution is especially unique with a revolutionary bundled
`lease or freight-as-a-service model. We provide customers with a fuel cell electric
`truck, the hydrogen fuel it needs and the all scheduled maintenance for a fixed total
`cost.
`
`
`All the customer needs to provide is a driver. This approach has proven very
`attractive and many customers are finding that they will be able to transition to zero
`emissions without an increase in total cost compared to their current fossil fuel
`solution. Our fuel cell electric truck reservation book exceeded 14,000 units or
`approximately $10 billion in potential revenue sometime ago.
`
`Since then we focused our efforts on direct partnerships with customers, who have
`dedicated routes rolling out our hydrogen station network along corporate
`customers dedicated routes or milk runs allows us to guarantee a high degree of
`hydrogen station utilization and avoid speculative investments in fueling
`infrastructure. Stations are being developed based on known customer demand
`along established dedicated routes.
`
`35.
`
`Later on the call, when answering a question regarding whether the Company
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`would expand beyond trucking and fuel stations, Defendant Russell replied:
`
`Well . . . you have to trust us, as there’s a lot more going on than you see in the
`announcements. As you know, we’re talking to lots of folks. We were talking to
`lots of folks before, but now this seems like just about everybody in the world
`knows about us. We’re having lots of conversations with lots of people. And when
`we are able to announce those publicly, we’re going to do it just as Kim said. A lot
`of the people we’re talking to would like to keep those conversations confidential
`for now.
`
`And so that’s one of the reasons we don’t announce everything that we have going
`on. But when we have something that we can publicly announce and you’re going
`to hear about it. I will make one additional to Kim’s point before. There’s going to
`be a lot of cool things in Nikola world. You want, you want to be there? We won’t
`wait. If we have something that’s material, of course, we’re going to announce it.
`We’re required to do that. But there’s going to be a lot of cool stuff that happens in
`Nikola world. That’s going to be a place.
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`13
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`Case 1:20-cv-04354 Document 1 Filed 09/16/20 Page 14 of 29 PageID #: 14
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`(Emphases added.)
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`36.
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`Finally, when asked a question regarding the grid and hydrogen’s role in balancing
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`the energy demand, Defendant Russell replied, in relevant part:
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`One of the great benefits of what Nikola is bringing to the world is the ability to
`balance the renewable energy that’s coming into the grid.
`
`
`***
`
`
`So one of the great things that Nikola offers to the world is when we put these
`hydrogen stations in and we start to get a lot of them in there, it represents a
`tremendous amount of demand for electricity that can match up to the supply. So
`we can make a – we can make hydrogen when the electricity is available and then
`we don’t have to add significant demand to the peak.
`
`
`***
`
`
`And so you got this mismatch between the peak of renewable production, if the
`wind happens to be blowing optimally around noon, and the sun always shines
`optimally at noon, then you’ve got way too much power at that point. And then but
`sometime around between four o’clock and seven o’clock you don’t have enough.
`Well, guess what, when Nicola is there in bulk, which we’re going to be in volume.
`We can take a lot of that extra power at the peak and turn it into hydrogen. And
`then we don’t have to be pulling power when the rest of the grid needs it so badly
`at the peak of demand.
`
`37.
`
`On August 10, 2020, Nikola issued a press release entitled, “Nikola Receives
`
`Landmark Order of 2,500 Battery-Electric Waste Trucks from Republic Services.” The press
`
`release quoted Defendant Milton, touting, in relevant part:
`
`“Nikola specializes in heavy-duty, zero-emission Class 8 trucks. The refuse market
`is one of the most stable markets in the industry and provides long-term shareholder
`value,” said Nikola Founder and Executive Chairman Trevor Milton. “The Nikola
`Tre powertrain is ideal for the refuse market as it shares and uses the same batteries,
`controls, inverters and e-axle. By sharing the Tre platform, we can drive the cost
`down for both programs by using the same parts. You couldn’t pick a better partner
`than Republic Services, a leader in long-term environmental sustainability and
`customer service. Republic Services will help us ensure the Nikola Tre meets
`customer and fleet lifecycle demands and we are excited to have them participate
`in the design process.”
`
`
`
`
`14
`
`

`

`Case 1:20-cv-04354 Document 1 Filed 09/16/20 Page 15 of 29 PageID #: 15
`
`
`
`In addition, the press release quoted Defendant Russell, who stated that “[t]his is a game changer,”
`
`and that “[r]efuse truck customers have always ordered chassis from truck OEMs and bodies from
`
`other suppliers. Nikola has fully integrated the chassis and body, covering both with a single
`
`factory warranty. Trucks will include both automated side loaders and front-end loaders — all of
`
`which will be zero-emission.”
`
`38.
`
`On September 8, 2020, Nikola issued a press release announcing that it had formed
`
`a strategic partnership with General Motors Co. The press release quoted Defendant Milton,
`
`stating, in relevant part:
`
`“Nikola is one of the most innovative companies in the world. General Motors is
`one of the top engineering and manufacturing companies in the world. You couldn’t
`dream of a better partnership than this,” said Nikola Founder and Executive
`Chairman Trevor Milton. “By joining together, we get access to their validated
`parts for all of our programs, General Motors’ Ultium battery technology and a
`multi-billion dollar fuel cell program ready for production. Nikola immediately gets
`decades of supplier and manufacturing knowledge, validated and tested production-
`ready EV propulsion, world-class engineering and investor confidence. Most
`importantly, General Motors has a vested interest to see Nikola succeed. We made
`three promises to our stakeholders and have now fulfilled two out of three promises
`ahead of schedule. What an exciting announcement.”
`
`
`39.
`
`The statements referenced in ¶¶ 23-38 were materially false and misleading because
`
`Defendants made false and/or misleading statements, as well as failed to disclose material adverse
`
`facts about the Company’s business, operational and compliance policies. Specifically,
`
`Defendants made false and/or misleading statements and/or failed to disclose that: (i) Defendant
`
`Milton had repeatedly misrepresented and/or exaggerated Nikola’s financial, technological, and
`
`operational profile; (ii) the foregoing misrepresentations were intended to, and did, present a
`
`materially false image of the Company’s growth and success, thereby artificially inflating the
`
`Company’s stock price; (iii) the foregoing misrepresentations were foreseeably likely to subject
`
`the Company to enhanced regulatory scrutiny and/or enforcement, along with reputational harm
`
`
`
`15
`
`

`

`Case 1:20-cv-04354 Document 1 Filed 09/16/20 Page 16 of 29 PageID #: 16
`
`
`
`when the truth came to light; and (iv) as a result, the Company’s public statements were materially
`
`false and misleading at all relevant times.
`
`The Truth Begins to Emerge
`
`40.
`
`On September 10, 2020, Hindenburg published a report entitled, “Nikola: How to