| 11:53 PM EST

Nikola Chairman Quits Amid Controversy

Stock price continues to tumble
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Nikola founder Trevor Milton has left the electric vehicle startup in the wake of investigations by authorities following allegations of fraud raised by Hindenburg Research, an investment fund that specializes in short selling.

Milton, who founded Nikola in 2014 and maintains a 35% equity stake, had served as executive chairman. He will be replaced by board member Steve Girsky, a former General Motors vice chairman who helped lead GM out of bankruptcy. Girsky also is the managing partner of VectoIQ, which backed Nikola’s reverse merger in June.

Rapid Decline

Earlier this month, GM invested $2 billion into Nikola. As part of the deal, GM received an 11% stake in the Phoenix-based company and agreed to manufacture various Nikola trucks, including electric and fuel cell-powered heavy-duty trucks and the Badger electric pickup.

Nikola Badger (Image: Nikola)

It’s been all downhill since then. Hindenburg accused Nikola of “intricate fraud built on dozens of lies," citing data from phone calls, text messages and emails. The report follows previous charges outlined by Bloomberg News in June that Nikola had exaggerated the capabilities of its vehicles and how far along it was in the development process.

Milton and Nikola have repeatedly denied the allegations.

In a statement, Milton said: “Nikola is truly in my blood and always will be, and the focus should be on the company and its world-changing mission, not me.”

About Girsky, he added: “As we move forward, I am confident Steve is the right leader to guide our vision at the board level. In addition to being an early believer and supporter of Nikola, Steve has more than 30 years of experience working with OEM leaders, suppliers, dealers, labor leaders and national policy makers, and has served as a director of numerous public companies.”

In a separate statement posted on Twitter, Milton vowed to defend himself against what he termed as “false allegations.”

Plunging Stock Price

Following the merger this summer, Nikola’s stock price soared—its market value briefly surpassed Ford’s. The company received another boost after the GM announcement.

But the Hindenburg charges triggered a 40% slide in less than two weeks. Shares plunged another 23% Monday morning before trading opened. Hindenburg stands to profit by the declines.

In addition to an investigation by the Security Exchange Commission, the Dept. of Justice reportedly has opened an inquiry into Nikola’s possible wrongdoing.

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