Indicted Nikola Corp. founder Trevor Milton is continuing to cash out his enormous holdings in the electric truck startup, collecting about $131 million in recent sales.
The amount realized from transactions reported to the Securities and Exchange Commission on Tuesday covered four sales totaling 11.7 million of Milton’s more than 63 million shares. He now holds slightly less than 52 million shares, or about 12.8% of the company’s 403.3 million outstanding shares as of Nov. 4. A year ago, Milton held about 92 million shares.
Milton also co-owns another 39.8 million shares, or 9.9% of Nikola stock, with Nikola CEO Mark Russell, but Russell holds the voting power for those shares.
Since Milton’s indictment on three federal fraud charges on July 29, the flamboyant and loquacious 39-year-old has sold $284 million worth of stock. He faces an April 2 trial in the U.S. District Court in New York, which his lawyers unsuccessfully tried to move to either Phoenix, where Nikola is based, or to Utah, where Milton resides.
The most recent sales on Nov. 19, 22 and 23, amounted to slightly more than an expected $125 million fine that Nikola expects to pay to settle an SEC complaint related to false claims by Milton that the SEC and the Justice Department charge were intended to drive Nikola’s stock price higher. Nikola has said it would seek reimbursement of the fine and costs from Milton.
Short seller scrutiny
Nikola (NASDAQ: NKLA) debuted as a public company on the Nasdaq following a reverse merger with special purpose acquisition company VectoIQ in June 2020.
SPACs are companies that raise so-called blank check funds from investors specifically to target young, often pre-revenue, companies with the intent of taking them public. They typically take a “promote” fee of 20% or more of the merged company shares.
As one of the earliest clean energy transportation SPACs in an 18-month spree of SPAC mergers across multiple industries, Nikola attracted significant interest from retail traders, who helped bid shares as high as $93.99 in the days after its debut. Shares closed Wednesday at $10.66.
Milton, an active user of Twitter who regularly made himself available to business and social media, hyped the company and spoke of technology breakthroughs later shown to be fabricated.
Milton stepped down as executive chairman and gave up his board seat 10 days after a September 2020 report by short seller Hindenburg Research that claimed Milton had lied about numerous claims, including a 2017 demonstration run of its first hydrogen-powered fuel cell truck later found to have been rolled down a hill rather than operating on its own power.
Nikola is producing pre-series versions of its Class 8 Tre battery-powered electric cabover model at a $600 million plant being constructed in phases in Coolidge, Arizona. Nikola officials have said regular production of the Tre, based on the Iveco S-Way, is on track for the end of Q1 2022 followed by a fuel cell version in 2023.