Zach Goldbaum (27:57)
Trevor talks a big game, but things are looking grim after the Hindenburg report. The once fawning business press is suddenly skeptical, investors are skittish, and Nikola's stock price drops by a third, wiping out billions of dollars in value. But soon, stock prices won't be the only thing Trevor Milton is worried about. Trevor Milton, the founder of Electric Truck Co. Nikola is voluntarily stepping down as executive chairman and giving up his board seat. This move comes after short seller Hindenburg Research accused Milton of making false statements about Nikola's technology in order to try and grow and secure partnerships with automakers. On September 21, only 11 days after the Hindenburg research report, Trevor announces that he's relinquishing leadership of Nikola. In a series of tweets, he explains that he's stepping down because he wants the focus to be on the company, not on him. To most of the public, it's a shock. Imagine Elon Musk abruptly stepping down from Tesla. But Trevor's September had been bad, even by pandemic standards. On September 14, Nikola issued their official rebuttal to the Hindenburg report. The company admitted that the truck in the commercial was not driving, but they used an interesting logic to deny that they intentionally deceived anyone. Nikola claimed that the commercial never explicitly stated that the truck was operational. Seems a bit weird to make a commercial of a truck driving and then get defensive when people assume that the truck can drive, but sure. Days later, the SEC and the Department of Justice launched formal investigations into Trevor Milton. It's not known exactly when Trevor found out about these investigations, but it's probably not a coincidence that he resigned days later. The same day Trevor resigns, he's hit with two sexual abuse complaints. A woman claims Trevor groped her non consensually in 1999. She was 15 at the time. She's also Trevor's cousin. A second woman claims Trevor sexually abused her when she worked at a security Systems company in 2004. She was also 15 at the time. Trevor doesn't address the accusations directly except to say they're false. Internally, it's possible he's more disturbed by something else taking place. The free fall of Nicholas stock price. Given the context, Trevor's resignation looks less like taking the high road and more like hightailing it out of there. It's said that only the guilty fleet, but the guilty also go rogue and say strange things that make you think, oh, wow, that guy is definitely guilty. The final line of Trevor's resignation statement went like, I will continue to spread love everywhere I go, and hope you do as well, for blessed are the peacemakers. But for someone like Trevor, his next move is an even bigger giveaway that the walls are crumbling. He goes quiet on social media. A year later, in July of 2021, the dust finally settled and Trevor was caked in it. He's sitting in a courtroom in the Southern district of New York next to a Defense attorney. With hourly rates so high, he should probably be on trial. But bleeding money is the least of Trevor's problems. Nine months after stepping down from Nikola, and a year after the company went public, Trevor Milton was arrested and charged with securities and wire fraud. If convicted, he faces decades in prison. Today we announce charges against Trevor Milton, former CEO and executive chair of Nikola Corporation. We charge that Milton engaged in a scheme to enrich himself by making false and misleading statements to retail investors about the development of products and technology at Nikola Corporation. The Fed's indictment is long and detailed. Nate Anderson's Hindenburg report is only the tip of the iceberg. The gist of the case against Trevor is everything about Nikola and all of its products was fake. The only real thing about the company was the money it scammed from deceived customers. Prosecutors have a lot to work with. Trevor's con was multi pronged. Nikola's 2016 event in Salt Lake City was a sham. Not only was the truck a pusher, but investigators found an extension cord inside the steering wheel powering the lights inside the truck. And the displays inside weren't screens. They were just tablets with images of trucks, gauges glued to the dash. Basically a prop car. The Badger pickup truck was another fiasco. A Nikola employee had just drawn up a computer image of a concept car. And then Trevor tweeted it. There was never going to be a water tap in the truck. It was just a fantastical idea. And the Badger never sold out either, which, duh, it didn't even exist. But this is just nitpicking. Trevor's piece de resistance was an even bigger scam. At no point did Nikola ever attempt to build a single hydrogen fueling station, much less 364 of them. As Trevor promised, Nikola created zero batteries and zero hydroelectric fuel cells for a car company once considered of equal market value to Ford. Nikola's final tally of vehicles manufactured was shown to be zero. As a wild final note, the only revenue Nikola declared in 2021 was from solar panels they installed a couple years earlier for just a handful of customers, one of whom was Trevor Milton. Fifteen months later, in October of 2022, Trevor is found guilty of securities and wire fraud. Executives at General Motors testified that at the time of their partnership with Nikola, Trevor's company had performed essentially no manufacturing. Their faith in Nikola was purely speculative. A number of Nikki Nikola employees took the stand, claiming they tried to get Trevor to tone down his boasts about the company's offerings. They told him the science didn't work the way he wanted. It to. But he lumped their concerns in with the haters who Trevor was always proving wrong. Retail investors who had put their faith and savings into Nikola, like Terry Allison and Samuel Lowell, submitted victim impact statements. Allison, who ran the Facebook group, claimed that Trevor harassed him on social media once the stock tanked. Lowell, the truck driver, said Trevor deserved, quote, a long prison sentence to fully appreciate the real harm he caused. Trevor is fined a million dollars, forced to forfeit all of his property, and sentenced to four years in prison. Whether people bought into the Nicholas scam because they wanted to make a quick buck, or they saw hydrogen trucks as an easy fix for our climate woes, the problem was the we'd rather do a trust fall than do our homework. It's nice to think that we found the next great innovator, one who could make us rich and change the world. That's why every blowhard names their company after Tesla. Fortunately, his first and last names have been used, so that only leaves his middle name. Milutinov Pro Tip. Do not buy a Milutinov sedan, no matter who makes it. But that is not where the Trevor Milton story ends.
