🐻The Bear Cave #31🐻
New Activist Reports, Tweets of the Week, What to Read, and Meet Me in NYC
Welcome to The Bear Cave — your weekly source of short-seller news. Feedback and sharing are always appreciated. If you are new, you can join our email list here.
New Activist Reports
Hindenburg Research published a blockbuster, 14,923-word report on electric truck company Nikola (NASDAQ: NKLA— $12.2 billion). Hindenburg alleged that a video of Nikola’s truck in motion was actually just its truck rolling down a low-grade hill. Hindenburg also alleged Nikola is buying or licensing much of its technology from third parties and alleged that Nikola’s “order book is filled with fluff.” For example, one Nikola customer, U.S. Xpress, reportedly has reservations for ~$3.5 billion in trucks despite having less than $5 million of cash on hand. Hindenburg wrote,
“We believe Nikola is an intricate fraud built on dozens of lies over the course of its Founder and Executive Chairman Trevor Milton’s career.”
Mr. Milton responded to the report quickly on Twitter. In a series of tweets, he promised “a clear, factual, low-emotional answer to the report” before the market opened the following day. Eight hours later, Mr. Milton tweeted that Nikola had hired Kirkland & Ellis LLP and “on advice of counsel, I won’t comment further.” Later that day Mr. Milton did a series of Instagram Live videos in which he discussed “the lies,” “the haters,” and “the bad people” that criticized his company.
J Capital Research published on Northern Dynasty Minerals (NYSE: NAK — $511 million), a copper and gold miner. Kerrisdale Capital previously called the company “a zero” in 2017.
Citron Research published a long thesis on Nautilus (NYSE: NLS — $447 million), a fitness equipment company. Citron highlighted the company’s “hyperbolic growth” according to credit card data and its potential as an acquisition target.
Meet Me in NYC
I am a recent college graduate very passionate about investing and short-selling and recently moved to New York City. If you enjoy this newsletter and want to meet, please hit reply! Happy to stay socially distant or wear a mask.
If you want to know more about me, you can read some of my past research here and here.
What to Read
“Nikola founder Trevor Milton insists vehicle start-up is roadworthy” (FT)
“In an interview with the Financial Times, he talked about Nikola — whose only tangible results are two hydrogen truck prototypes — as though the Arizona-based company had already revolutionized the world of transportation. “I knew I had a chance to change the world. And that's what I did,” he said.”
“How a Powerful Nissan Insider Tore Apart Carlos Ghosn’s Legacy” (Bloomberg)
“Behind every corporate coup is a mastermind. At Nissan Motor Co., that was Hari Nada, an insider known for his aggressive tactics and fondness for Marlboros, French cuff shirts and strong cologne.”
“Google’s Sundar Pichai Is a Really Nice Guy. Is That Enough?” (WSJ)
“Mr. Pichai, 48 years old, may need to start making the sort of painful choices he has been able to avoid so far. Prosecutors could try to force him to prune key pieces of Google’s global empire. He’s also facing internal pressure to chart a new path for the search giant beyond digital advertising.”
Tweets of the Week
Until next week,
The Bear Cave