M&M Residual and Trevor R. Milton Announce Concerns Related to Potential Fraud and Misconduct at Nikola Overseen by Steve Girsky, Britton Worthen and the Board of Directors
12 April 2024 - 1:30AM
Business Wire
M&M Residual Withdraws its
Nomination of Directors Amid Recently Uncovered Potential
Misconduct
M&M Residual and Mr. Milton Reserve All
Rights, Including Pursuing Potential Legal Action Against the
Officers and Directors of Nikola
M&M Residual, LLC (“M&M Residual”) and Trevor R. Milton
(collectively “we” or “us”) today announced that M&M Residual
has withdrawn its previously delivered nomination of five
candidates (the “Nomination”) for election to the Board of
Directors (the “Board”) of Nikola Corporation (Nasdaq: NKLA)
(“Nikola” or the “Company”) at its upcoming 2024 Annual Meeting of
Stockholders (the “Annual Meeting”). M&M Residual delivered the
Nomination because it believed it was critical to bring much-needed
change to the Company through a reconstitution of the Board. We
continue to believe that Nikola’s employees are incredible and
deserve honest, capable and visionary leadership. We felt that the
Nomination was the best chance to give the Company the ability to
thrive and prosper.
Unfortunately, instead of letting its stockholders decide and
voice their opinions on the direction of the Company at the Annual
Meeting, the Company initiated litigation against us and two of the
nominees (the “Arizona Lawsuit”). Further, we have recently learned
of highly concerning information regarding potentially fraudulent
conduct of Nikola’s management and certain directors, which leads
us to question the merits of the full Board. We have ultimately
concluded that it has become too risky to step in and expose our
remaining nominees to the Company.
For approximately four years now, the Board led by Steve Girsky
has overseen a staggering and consistent decline in value,
operational underperformance, product liability concerns, trucks
burning down, the breakdown of the Iveco Group-Nikola partnership,
value destructive acquisitions, the loss of meaningful European
market share, withholding information from stockholders, and the
sale of key assets, all while taking on debt and unnecessary
litigation. These actions have resulted in the destruction of
nearly 100% of stockholder value. While the Company has been
content to allege that Mr. Milton is the cause of the Company’s
misfortunes, we believe the documents and facts will prove
otherwise. We reserve all rights concerning recently uncovered
information and intend to hold the Company’s Board, officers, and
directors accountable.
The Company has only now publicly disclosed its 2023 sale
of the Nikola Badger and powersports program (the “Badger
Transaction”), to an entity unaffiliated with us, and seemingly
only to further its interests in the Arizona Lawsuit. In our view,
the Badger Transaction confirms that the Nikola Badger product was
real, used mostly Nikola’s parts and has material value. The Badger
Transaction, which was sold to a third party, was never disclosed
to the market or stockholders until just recently through the
Arizona Lawsuit. We find it highly concerning that the Company then
went on to sell additional shares in the public markets after
failing to disclose what we believe to be a material transaction,
likely causing stockholders to suffer significant losses.
The Company also previously blamed the recent occurrences of
Nikola trucks catching fire (the “BEV Fires”) on “foul play.”
However, after the Phoenix Fire Department found “no evidence at
all that supports arson,”1 the Company recalled the affected
vehicles acknowledging that “foul play” was unlikely to have caused
the BEV Fires.2 We find the facts alleged in a recent stockholder
lawsuit concerning the BEV Fires to be extremely troubling and
believe they indicate that the Company may have known there were
material issues with these products prior to making the “foul play”
comments to the public markets. We believe the Board has
continually made misleading statements about foul play being the
cause of the fires. Again, shortly after making these comments, the
Company went on to sell additional shares in the public markets,
which we believe caused further significant financial damage to its
stockholders. We are deeply concerned that Company executives and
management experienced no apparent or material accountability,
despite making what we believe to be materially false statements
and causing harm to the Company’s value, resulting in the Company
being sued by stockholders concerning the BEV Fires.3
Nikola stockholders deserve to know who approved the stock sales
and these concerning statements. It appears that no one is
monitoring the Company’s public statements or, if they are, who
approved these statements and why have they not been held publicly
accountable? Unfortunately, we have lost complete faith in the
Board and believe its members cannot be trusted to hold those
responsible for apparently misleading the public accountable.
As a fellow stockholder of the Company, we share your
frustration with the Company’s performance, lack of accountability
and apparently misleading disclosures. To us, and we believe many
in the public, the Board’s pattern is clear: destroy stockholder
value, blame Mr. Milton for the incompetence of the Board, sell off
promising assets, hide information from stockholders, take no
responsibility and then initiate litigation against anyone willing
to expose the truth. During his tenure, Mr. Girsky has overseen the
monumental destruction of Nikola from approximately $34.19 a share
when Mr. Milton stepped down to a dismal $0.98 that may force the
stock to be delisted soon.4
We believe the Company initiated the Arizona Lawsuit to
intimidate our nominees and thwart the lawful exercise of
stockholder rights. We have therefore decided to withdraw the
Nomination and pursue alternative methods to hold the directors and
officers of the Company accountable, including through the
initiation of independent litigation. For these reasons, we have
withdrawn the Nomination and no longer intend to solicit Nikola
stockholders with respect to the Annual Meeting, and our previous
group has been dissolved.
To all the Nikola employees and stockholders, we are sorry we
were not able to bring the change you deserve through the
Nomination, but we believe that the truth will soon be exposed,
vindicating our belief that Mr. Milton was ultimately the scapegoat
of the Board’s actions. One day we hope you have the leadership you
all deserve.
1 See
https://electrek.co/2023/07/06/nikola-truck-fire-no-evidence-arson/
2 See
https://www.thedrive.com/news/nikola-recalls-electric-trucks-because-foul-play-fires-were-coolant-leaks
3 See
https://news.bloomberglaw.com/litigation/truck-maker-nikola-sued-by-investors-over-recent-battery-fires
4 FactSet. Based on a closing price of $34.19 on September 18, 2020
(the last business day prior to Mr. Milton stepping down) and a
closing price of $0.98 on April 10, 2024.
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version on businesswire.com: https://www.businesswire.com/news/home/20240411044083/en/
Saratoga Proxy Consulting LLC John Ferguson / Joe Mills,
212-257-1311 info@saratogaproxy.com
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