Nikola shares fell more than 14% on Friday after the electric vehicle company denied fraud allegations made in a report by short seller Hindenburg Research.
Nikola said it is considering legal options while keeping Kirkland & Ellis and plans to take documents to the Security and Exchange Commission to refute the report.
The company's CFO Kim Brady said at a Cowen & Co industry conference Friday that Nikola would get a response next week.
"I look forward to reading this," replied Jeff Osborne, alternative energy analyst at Cowen. Hindenburg's "was certainly a very detailed report and today's publication was shorter than I had hoped."
The allegations come just days after General Motors announced it would take an 11% stake in Nikola and produce its electric hydrogen fuel cell pickup truck, the Badger, by the end of 2022. GM shares were up 1% to $ 30.46 through Friday.
"We are completely confident of the value we will create by working together," GM said in a statement. "We stand by the statements we made when we announced the relationship."
Nikola stock ended the day at $ 32.13, bringing its market cap to $ 11.6 billion after falling 14.5%. The share price has risen by more than 210% this year.
Hindenburg accused Nikolas founder Trevor Milton of making false statements about the company's technology to grow and partner with top automakers.
"To be clear, this was not a research report and it is incorrect," Nikola said in a statement Friday. "This has been a success for short selling driven by greed."
Hindenburg said there was evidence, including recordings of phone calls and text messages with false statements, and that the company staged a video showing a truck that appeared to be in working order. The research company said the truck was more likely to be "towed up a hill on a remote stretch of road and simply filmed it as it rolled down the hill."
The company said Nikola's response did not answer any of his 50+ questions "after promising a full rebuttal".
"We are pleased that Nikola is working with the SEC, and we are not surprised that Trevor Milton does not comment on a lawyer's advice," it said.
Milton tweeted photos Friday to refute Hindenburg's claims and asked, "Do these look wrong?"
Read Nikola’s full statement here:
"Yesterday an activist short seller whose motivation is to manipulate the market and take advantage of a manufactured drop in our inventory
Price published a so-called "report" containing misleading information and brutal allegations against our founder and CEO. To be clear, this was not a research report and it is incorrect. This was a success for short sales
driven by greed.
We have nothing to hide and we will refute these claims. You've already taken more time and attention than you deserve. We
have hired leading law firm Kirkland & Ellis LLP to investigate possible legal recourse, including in relation to the activist short seller and everyone else acting together.
Nikola also intends to share the activist short seller's actions along with evidence and records of the
US Securities and Exchange Commission
We respect investor rights and the integrity of the market and will contact you after we have further developed the process with the
Most importantly, Nikola continues to focus on delivering on the promises we have made to our stakeholders. "