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Data: FactSet; Chart: Axios Visuals

The EV startup Nikola Corp.'s stock fell Thursday after a financial research firm published a report claiming the electric and fuel cell truck startup is an "intricate fraud."

Catch up quick: It comes just two days after Nikola's shares jumped on the news that GM is taking an 11% stake in the company, is engineering and building its Badger pickup, and will supply key battery and fuel cell tech.

Driving the news: Hindenburg Research alleges Nikola has made a series of deceptive statements.

  • They include falsely claiming to possess proprietary tech, and releasing deceptive video of the Nikola One semitruck in operation.
  • "Nikola had the truck towed to the top of a hill on a remote stretch of road and simply filmed it rolling down the hill," the report states.
  • CNET has much more on Hindenburg's allegations here.

Of note: Hindenburg is short Nikola — that is, they make money when the share price falls.

Threat level: If some of the claims prove true, it could slow the rush of capital into unproven EV startups, especially via deals to take them public via mergers with special purpose acquisition companies, or SPACs.

  • These SPAC deals are all the rage lately. It's how Nikola went public in June, and EV startups Canoo, Lordstown Motors and Fisker have all announced SPAC deals in recent weeks.

Quick take: Axios chief financial correspondent Felix Salmon says the Nikola flap could cast a pall over SPAC deals more broadly.

  • "SPACs have historically been viewed as a bit shady," he says, pointing to a reputation they have recently been shedding.
  • "If the Hindenburg allegations hold up, investors will be that much less likely to trust future SPACs in this — or any — industry."

What they're saying: "We have retained leading law firm Kirkland & Ellis LLP to evaluate potential legal recourse, including with respect to the activist short seller and any others acting in concert," a separate statement published Friday reads.

Meanwhile, GM said in a statement: “We are fully confident in the value we will create by working together."  

Go deeper

Dec 15, 2020 - Economy & Business

SPACs could fuel next round of digital media wars

Illustration: Sarah Grillo/Axios

Digital media companies are looking to consolidate with the help of SPACs (special purpose acquisition companies), an increasingly popular alternative for businesses to raise money via a public offering, without undertaking a traditional IPO process.

Driving the news: Group Nine Media is considering using a blank-check company to acquire some of its competitors, The Wall Street Journal reports.

Updated 3 mins ago - Sports

Ex-USA Gymnastics coach dies by suicide after being charged with human trafficking

John Geddert. Photo: AFP via Getty Images

The body of John Geddert was found on Thursday, just hours after the former USA Gymnastics coach was charged with 24 counts of criminal misconduct, according to Michigan Attorney General Dana Nessel.

What they're saying: “My office has been notified that the body of John Geddert was found late this afternoon after taking his own life. This is a tragic end to a tragic story for everyone involved," Nessel said in a statement.

House passes Equality Act to boost LGBTQ protections

A protester holds a rainbow flag in Times Square in Oct. 2020. Photo: John Lamparski/SOPA Images/LightRocket via Getty Images

The House voted 224-206 on Thursday to pass the Equality Act, which would expand federal protections for LGBTQ people by prohibiting discrimination based on gender identity and sexual orientation.

Why it matters: The legislation passed in the House in May 2019, but never reached the Republican-controlled Senate under former President Trump. Democratic leaders believe there is a chance to pass the act into law this year with a 50-50 split in the Senate, but it is uncertain whether enough Republicans will support the bill for it to move forward.

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