Oh boy, this is going to be a doozy, folks. And I promised myself that I'd correctly pronounce Nicola throughout this entire video. I have to admit to you that I'm always tempted to pronounce Nikola as Nikola like Coca-cola because they are both full of hot air and gas. But I'm pretty confident that I can get through a whole video pronouncing it correctly.

but we'll see no promises. So recently on Electric Vehicle Drama Network, Nikola runs up from 10 in the beginning of 2020 to 97. Then it starts a long-term downtrend that is abruptly stopped by a partnership deal with Gm that results in a near doubling of share price in a single day. Then a short seller that has an actual financial interest in Nicola crashing alleges that Nikola was actually just a web of intricate lies.

And as a result, Nikola almost completely erased its gains from the partnership deal with Gm. And at the same time, Gm is coming to defend Nicola saying that they conducted appropriate diligence on them before investing two billion dollars into the company. But of course, when asked what appropriate diligence meant, Gm declined to answer. Other than to say it was a thorough review of business, legal and technical matters, Gm did great diligence, the best of diligence.

No one does diligence like Gm. Everybody agrees. So now we are at a point where Nikola is basically saying that even though some of the allegations against them are true, the report put out is just a Bs hit piece that was meant to make Hindenburg and other short sellers money. Meanwhile, we have short seller Hindenburg replying to allegations this morning and saying that Nicola just outright admitted fraud and that investor should not be fooled into thinking this is anything else than objective fraud.

And we have investors who can't seem to make up their minds on whether or not Nikola is a buy or a sell with shares of Nicola still traded above its lows from Monday pre-market open. But amongst all this kerfuffle, what do you need to know about this? Well, I went ahead and read Nicola's rebuttal and Hindenburg's rebuttal so that you don't have to and I'll be discussing the five main points that you need to know. Let's go ahead and get to rebuttal point One: The truck rolling Downhill. Allegation.

So, you've likely heard that Nikola was accused of letting one of its trucks run down a hill and filming and editing it to angle it in a way to pass it off as driving under its own propulsion. In the video, Nikola actually admitted that this did indeed happen, but explain that the coverage on it was quote misleading. They said Nikola never stated its truck was driving under its own propulsion in the video. So to paraphrase this, this is sort of like saying well, yeah, it was rolled down a hill and we made it look cool for our private investors, but we never specifically said that it wasn't being rolled down a hill.

And because we didn't specifically say it wasn't being rolled down a hill. then hey, you know that that was honest. They claim that the truck just says that it's in motion and that it's not specifically being powered by an engine or anything like that. And because they didn't specifically say that it was being powered by their technology, then hey, they're totally off the hook.

But the problem is, they did hype it up as if this was the real thing. For example, underneath this video that Nikola themselves published, they wrote behold the 1 000 Horsepower Zero Emission Nikola One semi Truck in Motion which strongly suggests that this truck is using its 1 000 horsepower to drive even though it's rolling down a hill and was just edited to look like it was flat. But this gets better because to quote Executive Trevor Milton specifically at the time of this promo, he said this isn't just a pusher like a lot of vehicles that they unveil that are just vehicles that don't actually function. this is a fully functioning vehicle which is really incredible.

So again, very ironic. A video is put out showing a truck deceptively powering itself at the same time as you saying that the truck is fully functional. But then you defend yourself by saying well, we didn't really say that that truck was fully functional. We said that the truck in general is fully functional and taken alone.

Some investors would be able to forgive this misleading promo video. but when you start stacking up all of the different bullet points, it creates a totally different picture for Nikola. in my opinion. All I am saying with this point is that it's extremely ironic to preach that your truck is fully functional.

then use a truck in your promo that isn't fully functional. Why would you market your company with a truck that's rolling downhill that isn't really functional when you could use your fully functional one? Okay, number two Employee choices. So Hindenburg had originally questioned the employee choices of Nikola. the Executive Chairman, Trevor Milton appointed his brother to a key position: Hydrogen Production and infrastructure.

This is a highly scientific role that requires scientific knowledge and experience in hydrogen research and production. yet this individual did not have any relevant experience. In fact, Travis Milton's relevant experience according to his brother and according to the company, was operating his own construction company. But folks, if you just take five minutes to google Travis Milton's work, you can see his construction company literally focused on building concrete slabs for homes in Hawaii, and I will be the first to tell you that these are quite nice driveways.

I would totally drive on them, maybe even roll a nickel a truck down them. but it may be a bit of a stretch to claim that driveway constructor Travis Milton was the best pick for this job. Okay, but wait a second. this gets better.

In Nicola's rebuttal, they said Mr. Milton is qualified because he poured two long and challenging driveways and extensive walkways with elaborate Hawaiian leaves. Okay, I wasn't sold before, but elaborate Hawaiian leaves? I'm totally sold. Maybe after he's done with Nikola, he could go and maybe cure cancer or solve world hunger.

Okay, number three is quite a doozy and it has to do with Nikola's battery. So Hindenburg alleges that Nikola hyped a letter of intent to acquire battery technology company Zapgo, but then this turned out to be vaporware and their response was paraphrased by basically saying that Nikola wasn't actually hyping Zapco, they were hyping a game-changing battery technology that is part of a secret a secret R D agreement that they can't provide any details on right now. But trust them, it's great. It's great.

Everybody knows it's great, but it's secret and I spent a lot of time digging through the battery talk, but it's literally all over the place. First, they say it's a secret agreement that they can't talk about and that no one can know about yet. They hype it every chance they get and for some reason, they still use Gm's battery. and then they go and say, okay, well, actually it's tied to a university that's developing the technology right now, but when pressed on what university it is that's developing the technology, they can't answer.

Okay, Number four, Nikola does not make inverters in-house so Hindenburg alleges that while they claim to make their inverters themselves, it actually is just a third-party inverter that Nikola goes and pastes a sticker over the real supplier's name. Nicola, once again deflected and said, well, sure we do that, but we never stated that we didn't do that. But the key factor here is the defense is that hey, you know what We do use other people's technology, but we never say that we don't reason that we block out supplier names is to protect that information from competitors and the media. and that even though Milton said that he never specifically stated that the inverters were designed in-house that he did say that others were asking Nicola to use their technology.

and why would other competitors ask Nikola to use this technology if it wasn't Nicolas to give in the first place. And folks, this is a pattern that we pretty much see with all of Nikola's allegations. We get a deflection and then we have to pile through misleading statements that seem specifically meant to hype up investors and raise capital. Okay, number five, unanswered questions.

So Hindenburg's research alleged a lot, but they did make it simple for Nicola to respond by putting 53 questions at the end of their report. And most of these questions were fairly straightforward, but Nikola only responded to 10 of the 53 questions. Some of these questions included things like this: In 2018, you were sued by your former Cfo. What were the allegations in the complaint, which is now sealed? Another question was do you still consider the Nicola 1 to be fully functioning despite needing to snake an electricity cord up through the stage in order to power the otherwise completely non-working vehicle.

Another question was why did you post a video saying that the Nikola 2 had gone from zero to 60 miles per hour in just under 5 seconds When anyone with a stopwatch can see that it took at least 10 seconds. Next question, Why did you say that you were gobbling up real estate assets when your quarterly report showed no new real estate assets? No response. And yes, some of the questions of these 53 were a little bit unfair. Like, do you think it's wise to threaten to sue journalists for getting a story totally correct? Like, obviously this is a biased question and isn't a question that can be won, so I wouldn't expect any company to really answer this question, but still.

these were just a few of the 43 questions that weren't answered and in my opinion, leaving very specific questions out. Oftentimes questions that are really just clarifications on statements that Nikola personally made it. This is a huge problem. You don't want to deflect on clarifying your own statements if you cannot explain your statements and can't defend yourself on things that you complain about are total lies.

What does that say about you as a company? Okay, anyways, folks, I could go on and on but this is the summary of the main point. I will make an update video if the story develops in a way that could be useful for us, but at this point this is where we stand. And let me just finish this off by saying one thing. The truth is that the world is very rarely black and white, and it's probably true that Nikola has been hit harder than it deserves on some points, but the key is taking the time to look into each point yourself and make your own decision.

I never want to create the perception that I'm trying to push you in one direction or the other and you shouldn't let anybody else either push you in one direction or the other. The goal of my videos is always to present my thoughts and findings, but I always want you to think for yourself. I don't encourage blind following because that makes us all worse off. So in conclusion, if you see a lot of negative publicity or a lot of positive publicity about any company, don't just assume that that's the truth.

Go and look at it yourself. There are some points in Hindenburg's research that really sounded ridiculous to me, so at the end of the day, you need to take it upon yourself to educate yourself on what exactly is happening to what is actually driving these companies. Anyways, folks, I do hope this video is valuable to you if you. have any questions, feel free to reach out to us.

In the comment section below, remember to trade like a spoiled brat. The market. Well, it doesn't care about you, so don't try to care about it. Make sure you're trading like a spoiled brat.

you're only taking the best of setups. And lastly, if you are looking to learn how to trade, if you want to be forged into a trader, we are offering 50 off if you type in Stay Home 2020 before checkout and that link is in the description below. Anyways, folks, have a great day and I'll see you in the next video.