Watch Now

Minting millionaires and building buzz at Nikola

Staying in the news is corporate strategy at startup electric truck maker

Nikola Corp. Executive Chairman Trevor Milton (L) says keeping attention focused on the startup electric truck maker is part of corporate strategy. (Photo: Nikola)

Nikola Corp. Executive Chairman Trevor Milton believes buzz-building creates long-term value for the electric truck startup. So, even if publicity was not a goal of his recent gift of 6 million of his shares to several dozen early employees, he’s fine with the attention.

“I think it’s important for every company in the world to stay in front of their followers, and their investors, and their clients, and their customers,” Milton told FreightWaves. “Investors in this generation want to be kept up to speed [and] a little bit entertained. They want to see what’s going on. They want to follow you.”

Milton is happy to go along — most of the time. His heavily trafficked Twitter account brings out hydrogen power fans and detractors. Sometimes he scraps with them. Milton regularly makes himself accessible for interviews.

“It’s definitely our job to keep our name in front of the media, because you want people to learn about you,” he said. “You want to get people excited about your product. You want to get a following behind you. That’s why we do it. It’s for the long-term growth of the company.”

And Nikola (NASDAQ: NKLA) is growing. It has nearly 400 employees. “We’re bringing on five to 10 a week,” Milton said. “We actually just hit capacity at our brand new headquarters.”

A Christmas pledge

It was at a Christmas party in 2017 when Milton told the original group of fewer than 50 Nikola employees he would personally reward them if Nikola became successful. By most measures, the company’s public debut in June via a reverse merger was a roaring success. 

At Tuesday’s closing price of $41 a share, Milton’s grant to employees was worth $246 million, or somewhere around $5 million each. The shares are frozen until Nov. 30. That’s when a lockup expires on the holdings of early investors. Nikola’s valuation is nearly $15 billion.

Bloomberg first reported the gift on Aug. 26. The company issued a brief press release to ward off stories that Milton was selling a stake in the company he founded.

“This was going to be disclosed anyway,” Milton said. “I didn’t want the media to think that I sold 6 million shares. The world would’ve gone crazy over it. I just wanted them to know, ‘Look, this is a gift to my employees. I get nothing out of it. They all became very, very wealthy. They all became millionaires.”

As stock options vest in coming years, they could grow richer still.

While Nikola’s initial battery-electric truck production in Europe and meaningful revenue is still a year away, the company is part of the conversation about the future of zero-emissions sustainable transportation. It recently signed a contract with Republic Services (NYSE: RSG) to sell up to 5,000 battery-electric refuse trucks beginning in 2022.

Fulfilling promises early

Like the stock grants, Milton wants to deliver early on other promises.

The Republic deal made good on one of three pledges Nikola made to analysts when the company went public. The second is to name a partner to build a network of 700 hydrogen fueling stations for fuel cell Class 8 trucks scheduled for production in 2023. The third is a manufacturing partner for the Badger battery-electric pickup with a fuel cell range extender.

Nikola knows who it will work with on Badger. Milton is legally bound from revealing the name.

“We sat down with probably every major automotive group in the world,” he said. “We had discussions. And we had term sheets for most of them. We’ll be announcing that as soon as we possibly can.

“I think we’re going to beat every one of our timelines,” Milton said. 

Stock price volatility

Despite consistently missing production deadlines for years, electric car and truck rival Tesla Inc. (NASDAQ: TSLA) is by far the most valuable automotive company in the world. Its five-for-one stock split on Monday did nothing to slow its momentum. Before its more than 400% appreciation this year, Tesla shares swung wildly as short-sellers bet against its success.

In its first three days as a public company, Nikola soared to nearly $100 a share. Short sellers moved in, hoping a falling price would let them cash in by selling borrowed shares. The stock today trades in the low $40s with occasional news-driven bounces.

“Every stock out there, when it comes to new technology and high value, is going to be volatile,” Milton said. “They’re going to fluctuate a lot. Even Amazon does. Even Apple does. You’ve got some big swings in those stocks because people are looking for good returns. They’re looking for places where they believe they can make a change.”

His advice to investors and employees who might be distracted by a roller-coaster share price: Ignore it. Look at the price month over month or at the end of a quarter.

“It’s a little bit annoying sometimes. But that’s part of the price you pay for being public and having a good valuation,” he said. “If you’re going to have a high valuation, you’re going to have a little bit of volatility.”

Related articles:

Republic Services orders 2,500 electric refuse trucks from Nikola

Hydrogen fuel: Linchpin of electric truck maker Nikola’s business

Flood of new and cheap shares sink Nikola stock

Click for more FreightWaves articles by Alan Adler.

Alan Adler

Alan Adler is an award-winning journalist who worked for The Associated Press and the Detroit Free Press. He also spent two decades in domestic and international media relations and executive communications with General Motors.