Written by Cláudio Afonso | LinkedIn | X
A U.S. federal judge has certified a class action lawsuit against Nikola, a court filing published Monday showed. The decision allows shareholders who purchased shares of the EV maker between June 4, 2020, and February 25, 2021, to pursue claims of financial losses tied to alleged false and misleading statements by the company.
In June 2020, Nikola shares were trading at approximately $2,030 when adjusted for subsequent reverse stock splits. Eight months later, by February 2021, the adjusted share price had fallen 68.4% to $640.
The class action argued, among others, that Nikola claimed to have 14,000 purchase orders in 2020 which would represent “2 to 3 years of production and billions in revenue.” Additionally, the company would also have already established an assembly line for its fully electric truck in Germany.
U.S. District Judge Steven P. Logan ruled that the plaintiffs demonstrated common legal or factual issues and the predominance of these issues over individual claims.
The case centers on allegations that Nikola misrepresented its technology and operations, causing its stock price to be artificially inflated between mid-2020 and early 2021.
The court dismissed Nikola’s arguments that the alleged misstatements did not impact the stock price. Judge Logan concluded that the EV maker failed to provide enough evidence to challenge the price impact of its alleged misrepresentations.
Trevor Milton, Nikola’s founder and former CEO, said last week he plans to share details about his time at the company. Milton later posted a video denying fraud allegations and defending the performance of Nikola’s trucks.
Answering a comment, the founder of the truck maker said, “Unfortunately I don’t think it [the company] can be saved.”
Written by Cláudio Afonso | LinkedIn | X
