Indicted Nikola Corp. founder Trevor Milton is continuing to reduce his stake in the company, selling 7 million more shares over the past week, according to a Securities and Exchange Commission filing on Friday.
Sales over the three days brought nearly $77 million on top of $71.5 million for another 7 million shares sold six days before his July 29 indictment on federal fraud charges.
The government alleges Milton tried to enrich himself by inflating the value of company shares through false and misleading claims about the startup’s technological accomplishments and prowess.
The large selloffs Tuesday through Thursday depressed the share price even as Nikola (NASDAQ: NKLA) announced an expansion in the dealer network for the company’s Class 8 battery-electric daycabs and received a $2 million Department of Energy grant to develop hydrogen filling stations.
After opening at $11.52 on Tuesday, the share price closed Friday at $9.53, just 17 cents above its 52-week low.
Milton now owns 63.3 million shares, about 15.8% of outstanding shares. He is still Nikola’s largest shareholder, but the gap between Milton and CEO Mark Russell continues to shrink. Russell owns 12.3 million shares of the company.
Before this week, the stakes owned by Milton, Russell, directors and senior leaders totaled more than 50% of outstanding shares. Nikola said in an SEC filing that concentration of ownership could cause new investors to avoid purchases because they would have little influence over company decisions.
Additional shares are being issued as part of a $300 million line of credit, which will increase the number of outstanding shares to about 418 million by year end, diluting the value of existing shares as they are sold to raise cash.