Nikola Corp. saw its stock gain 3% yesterday - despite still being in the middle of a major fiasco.
As I told you last week, Nikola has been dealing with legal issues regarding a slew of fraud allegations. And while the company was thoroughly investigated and mostly cleared, the investigation's impact is still playing out.
The biggest loser happens to be Nikola's founder and chair, Trevor Milton. It was announced on Monday that the founder voluntarily resigned - 10 days after short-selling firm Hindenburg Research released a report claiming Nikola was an "intricate fraud."
Milton's resignation only further spooked already-shaken investors, and the stock plunged nearly 30% in premarket trading on Monday. While Nikola had a backup plan already in place - including adding Stephen Girsky, former vice chair of General Motors and a member of Nikola's board, as chair of the board, effective immediately - investors still piled selling pressure onto the stock.
Now, while Milton has stepped away, he's nowhere near done. Here's what the young founder had to say...
"I asked the Board of Directors to let me step aside from my roles as Executive Chairman and as member of Nikola Board of Directors. The focus should be on the company and its world-changing mission, not me. I intend to defend myself against false allegations leveled against me by outside detractors."
But regardless of whether Milton "clears his name" or not, Nikola is still in a tough spot. And it's going to be one that's hard for the company to bounce back from - especially as the stock continues to move down.