Ousted Nikola Founder Urges Leadership Change at EV Maker

(Bloomberg) — Nikola Corp. founder Trevor Milton called for leadership change at the electric-truck maker and urged shareholders to vote against company-backed proposals in his first social-media posts in years.

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Milton, who was convicted of securities fraud last year, said in identical posts Thursday on his Instagram and LinkedIn pages that he voted about 50 million of his shares against all proposals from next month’s annual shareholder meeting. He said investors should also vote “no” to reelecting directors and a measure to allow the issuance of new shares.

“The company does not need new shares, they need new leadership,” he said.

Milton is the company’s largest individual shareholder, according to data compiled by Bloomberg. He resigned in September 2020 and was later found guilty of defrauding investors. He is awaiting sentencing, due to take place in September.

Milton’s representatives couldn’t be reached for further comment.

In a statement, Nikola said Milton is in “direct violation of the agreements” he made when he left the company. “He agreed to vote in favor of the directors nominated by the board and not to solicit others to vote against any director or other proposal,” it said.

The company’s annual shareholders meeting was adjourned on June 7 until July 6 to garner enough votes for Proposal 2, the only outstanding resolution, a spokesperson said by phone.

The measure would let the company issue new shares. Nikola Chief Executive Officer Michael Lohscheller said at an investor meeting earlier this month that Proposal 2 would allow the company “to raise capital and enable us to continue working towards achieving our business plan milestones.” That’s critical, he said, because “what we’ve created is very capital-intensive.”

Public Comments

Milton’s downfall was brought about by misgivings about his statements to investors in Nikola, which went public in a reverse merger in June of 2020.

Bloomberg reported that same month that Milton overstated the ability of Nikola’s debut truck. Shortly thereafter short seller Hindenburg Research accused Nikola of “deception” and lying about its technology, triggering probes by federal regulators. Hindenburg’s founder, Nate Anderson, tweeted Thursday about Milton’s latest Instagram post.

Prior to his downfall, Milton relied on social-media platforms like Twitter and Instagram to promote his company. He would communicate product updates in tweets and push back against the company’s critics in live Instagram video feeds.

Nikola’s shares soared 30% Thursday to $1.40, part of a seven-day rally that has sent shares up 158%. The stock was unchanged as of 5:48 p.m. in postmarket trading in New York.

(Updates with comment from Nikola in sixth paragraph.)