Just a few months ago, Nikola Corporation “cracked” Wall Street with its promise to build 14,000 electric trucks and compete with Elon Musk and Tesla’s Cybertruck. Shortly thereafter, three weeks ago, the company’s shares plummeted after reports suggested it was indeed a new Silicon Valley scam.
Since it was founded in 2014, Nikola has not made a single euro in revenue or profit. The announcement of the start of production of 14,000 electric trucks and the design of a pick up Prototypes that can compete with Tesla Motors attracted the attention of large investors such as General Motors, which invested $2,000 million in exchange for 11% of the company.
However, the Hindenburg Research investment fund has repeated its doubts about Nikola Corporation’s viability. After a thorough analysis of the company, they confirm that it is a “complicated scam”. Since the report came out on September 8, the company’s shares have fallen sharply, and many are already questioning whether this is the new Silicon Valley scam. Although its CEO, Trevor Milton, has denied the allegations The SEC and the US Department of Justice have started their investigations.
It’s not the first time the company has been accused of lying when it launched its products. Already in 2018 Nikola released a promotional video for ‘Nikola One’, the first prototype of the electric truck they are presenting now, which never worked. In the video, the company wanted to give the impression that the prototype worked perfectly and would be released soon, which turned out to be false. “When Nikola moved on to the next generation of trucks, the ultimate decision was not to invest in the Nikola One’s self-propelling capability,” they said in a statement at the time.
Theranos or Juicero, other Silicon Valley scams similar to Nikola’s
While not common, stories of fraud in Silicon Valley are repeated from time to time. Besides Nikola’s alleged cheating, we find other cases where similarities can be drawn. One of them is Juicero, who goes by the name of “the prison of the juices” and that brought in $120 million to make a juicer, which they sold for 600 euros. In reality, the preparation used to make the juices could be extracted with one’s own hands, making the device a scam.
Another high profile case was that of Theranos, a company that discovered a “revolutionary” system for conducting blood tests. The project received funding of 1,400 million euros. In reality, however, the machine, which could test blood with just one drop, didn’t work. The case is still in the hands of the American judiciary, which could sentence Elizabeth Holmes, its creator, to 21 years in prison.