The Exposé heard around the World
The Exposé heard around the World : The Public's Reaction
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| Image Credit: MEL Magazine |
Following the viral release of information regarding Nikola’s corporate fraud by Hindenburg Research as well as the investigation into the company initiated by the Justice Department, there was widespread press coverage that described the sequence of events and coverups misappropriated by Nikola headed by Trevor Milton. This event seemed to shine a light onto the dangers of social media advertising and how easy it was to weave billions of dollars’ worth of lies with a non-functional truck prototype, technical hoopla coupled with creative marketing, and layers upon layers of deluding elusive statements. While the press simply reported the facts about the allegations faced by Nikola, the public had a few thoughts to share regarding the uncovering of this elaborate scheme.
The most prominent emotion that was reflected in the comments underneath the Hindenburg report was relief and virtual standing ovations regarding the comprehensiveness of the release assembled by the organization. Some of the comments came from people who were looking to invest into the company themselves, but, after coming up with a lack of support in the claims made by the company, shied away from putting in their resources towards the new company. One such individual, J. Johnson, replied to the report, directing his words of appreciation towards Hindenburg Research that he “speaks for the vast majority of the retail investors when he says thank you for your dedication to finding the truth and keeping some of us from FOMO and getting fleeced” (Source: Hindenburg). In this comment, Johnson also briefly references how many fell for the lies circulated by Nikola due to the fear of missing out and this report opened their eyes in investing in companies that are backed with tangible evidence. Such companies, Johnson says, “don’t have any intention or ability to actually produce a product.” So, basically, the main takeaway is do your homework.
What about the government? How are they reacting? It is clear that the officials took swift action within mere days following the report. The SEC filed a case against the company, conducted an investigation into the corporate dealings of the tech company and almost one year later, the government sector proceeded to charge Trevor Milton of “violating the anti-fraud provisions of the Securities Act of 1933 and the Securities Exchange Act of 1934” (Source: SEC). The investigation has been ongoing for several years now, so one thing is for sure, the government is not letting off Trevor Milton easy whatsoever. Trevor Milton is scheduled to be sentenced on “one count of securities fraud and two counts of wire fraud” (Source : NY Times) later this year.
Many people of varying backgrounds have communicated their views regarding the unfolding of these unfortunate events in the electric vehicle industry. A common theme we see is that there is a lesson in this for us all: we should invest in results rather than CEOs who talk a good game.
The blog post provides a comprehensive overview of the Nikola scandal, including the events that led to the uncovering of the fraud and the subsequent actions taken by both the public and the government. The writer also highlights the importance of doing research before investing in a company and not falling for empty promises made by charismatic CEOs. One question I have is whether the writer believes that the Nikola scandal has damaged the reputation of the electric vehicle industry as a whole, or if it is seen as an isolated incident. Additionally, it would be interesting to know the writer's thoughts on what steps could be taken to prevent similar corporate fraud in the future, particularly in the tech industry.
ReplyDeleteFollowing these events, the electric vehicle industry felt minimal to no ramifications. Nikola was a very isolated incident as the company took a very unique approach because the technology that they chose to implement in their zero-emission vehicles is unique to the industry as a whole. Today, Tesla, Lucid, and other large automobile companies continue to expand into the EV industry as we are continuing to see more and more electrics cars populating the roads. However, following this scam, investors and companies would likely be more reluctant in forming a product similar to Nikola's due to the residual negative stigma.
DeleteIts a shame that this was a complete scam. Its insane to think they thought they could get away with this. I think the biggest let-down is the fact that we aren't getting this revolutionary technology that would have a huge impact on our carbon emissions. Do you think the government has a duty to audit companies, especially those working with high profile publicly traded corporations to ensure financial safety for the consumers/investors?
ReplyDeleteAfter learning about these incidents, I feel that both the government and the public can benefit from awareness of new and upcoming companies that have gained a lot of traction in short amounts of time. I think that government institutions should look into taking on a more hands-on approach and ensuring that the statements and products being advertised correlate with what is feasible for the company to produce, especially if this company is going public. It is no small feat to become a publicly-traded corporation, and seeing a company as knee-deep in fraud in deception as Nikola rise to this stage, does not reflect well on the government's ability to regulate commerce as needed.
DeleteThere's a huge difference between having an idea and an actual prototype. If Nikola started this off as an idea, rather than something they are working on then the backlash won't be as harsh. Or, if they do have a prototype and it doesn't seem to be working, they should've been more transparent about it. It's sad to see that this was just a poor attempt of trying to get ahead in the business.
ReplyDeleteIt's truly disappointing to see alternative energy be used as a scheme to make money. The Earth is facing a crisis where much harm from humans is creating damaging results for the future. Though it would have been better if they presented the product as an idea or prototype, I understand why they didn't. Nikola would have lost the status of a competitor against Tesla. There are many ideas and prototypes out there that aren't being taken seriously. They have the potential to be the new future yet they aren't seen by the public in that way. Though these lies were damaging and deceptive, it placed a genuine future for hydrogen-electric energy.
DeleteIt's disheartening to see a company faking their work towards greener transportation of goods. Do you think the public lost hope in greener technologies after this incident? Should people be more skeptical when revolutionary products like these are first introduced?
ReplyDeleteI don't believe that people have lost hope in greener technologies after the failure of Nikola. I believe that the people care so much about the Earth and its future. With new alternative technology, there will be successes and fails. The world may see a set back with this but they now have a base for a potential future. The idea of the hydrogen-electric energy is great yet the execution of it by Milton was not. Another company can tackle this new alternative energy and make it a reality. I do believe that going forward, people should be conscious about the new technology. They should be skeptical at first as all new technology has its issues in the beginning. As times goes on and the technology holds up, people can start to trust it.
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