馃攳
Inside Nikola and the SPAC (No Product, Zero Revenue and Value $13 billion) - YouTube
Channel: Raw Startup
[0]
- On September, 2020,
[2]
I asked this question on Reddit.
[4]
Was there ever a company worth 13 billion
[8]
before launch of a product?
[10]
So, there's no product released
[11]
and there's probably
not gonna be a product
[12]
in the next year or so.
[14]
The question is, has this
ever happened before?
[17]
The post got quite a lot
of traction on Reddit.
[19]
I got 93 comments on it, and
nobody had a good answer.
[24]
This could be the first,
[25]
the first time ever a
company's worth 13 billion
[30]
before the launch of a product.
[32]
That's just crazy.
[34]
At least nobody's ever
heard about this before.
[35]
How did this happen?
[36]
How did a Nasdaq company
become worth $13 billion
[40]
without having a product
and even a product release
[43]
in the near future?
[44]
That's what I wanna look at.
[45]
How could it happen?
[46]
Let's look at the backstory,
[48]
and some of the backstory
is what they call a SPAC.
[51]
I want to explain
everything, what a SPAC is?
[53]
Because there's some magic to the story,
[55]
we're gonna look into.
[56]
On top of all this, the Nikola story
[58]
is being compared to Theranos.
[60]
The famous fraud led by Elizabeth Holmes.
[63]
There's a big difference though.
[64]
Theranos was a private company.
[66]
Nikola is a listed company,
a NASDAQ listed company.
[69]
So, all in all this fascinates
me how this company went
[72]
from nothing to a multi
billion dollar company
[74]
in a very, very short time.
[76]
- [Announcer] This is Raw Startup.
[79]
- I'm the founder of Vivino.
[80]
We're the world's largest
wine app and wine community
[84]
with over 46 million
users around the world.
[87]
We sell wine for hundreds of
millions of dollars every year.
[90]
And then IPO could well be
something we look at some point.
[94]
Let's start by looking at
this guy, Trevor Milton,
[96]
the man behind everything.
[98]
He's from Utah, comes
from a Mormon background,
[101]
did his mission in the Favelas of Brazil.
[105]
In 2015, he founded Nikola Motors
[108]
with his brother, Travis.
[110]
Okay, this is when the weird stuff starts.
[112]
Why is the company called Nikola?
[114]
Clearly, he's a big fan
of Elon Musk and Tesla,
[118]
but calling the couple Nikola?
[119]
Okay. Background here.
[120]
Obviously, Tesla is
named after Nikola Tesla.
[123]
And this guy calls the company Nikola.
[125]
I mean, putting yourself
right behind Tesla is fine
[128]
but like name, this
feels like a stocky name.
[131]
Like why would you call it Nikola?
[133]
It's like giving them the same
name as Tesla, it's weird.
[136]
Between 2015 and March 2020,
[138]
Nikola is just another private company.
[141]
They make all kinds of lofty
promises about the future
[144]
and things that may or may not happen,
[145]
most of them did not happen.
[147]
For this story, March,
2020 is the key moment.
[151]
In March, 2020 Nikola merges with a SPAC,
[153]
and the day after Nikola
is a listed company.
[157]
Yes, they go from a
Regular Joe private company
[159]
to a listed company on NASDAQ.
[161]
Okay, let's look up
what this SPAC thing is.
[164]
SPAC means Special Purpose
Acquisition Company.
[167]
It works like this. Someone goes out,
[170]
raises some money and
lists an empty company.
[173]
Basically a company that
just has a lot of money.
[176]
Then they started looking for
another company to merge with.
[179]
And this company can just list
[181]
without having to go
through several years.
[184]
But doing an IPO is a lot of work.
[186]
It takes two, three years.
[188]
This is like a shortcut to
an IPO because you just merge
[191]
into this SPAC.
[192]
And suddenly you're listed.
[194]
It's like the shell with a lot of money
[196]
that's listed waiting to buy somebody.
[199]
Then you can buy that
company, merge, change name.
[202]
Suddenly that private company
is now a listed company.
[205]
That's pretty much what
happened with Nikola too.
[207]
In Nikola's case, there
was a company called
[209]
VECTOIQ Acquisition Corp
[212]
V-T-I-Q.O
[214]
A SPAC with some money in it,
[216]
just waiting for a company to merge with.
[218]
There's nothing wrong with a SPAC.
[220]
Actually, half the companies
getting IPO right now are SPACs
[224]
empty companies just
waiting to find somebody
[226]
they can express IPO.
If we can call it that.
[229]
The tricky part here is
though, once you're listed
[232]
you have to behave like a listed company.
[235]
You now have to follow
all the rules of NASDAQ
[238]
and of SEC and so on.
[240]
And if you don't, you'll get a big fine.
[241]
You could end in prison.
[242]
This is serious stuff,
as soon as you're listed.
[245]
The problem is you go
straight from private
[248]
to list listed in no time.
[250]
Usually an IPO will take two, three years.
[254]
You just express lanes to
being a listed company.
[256]
It's like a child that's like 10 years old
[259]
and suddenly they're 21.
[261]
That's a tricky one.
It's like a fast track.
[263]
"Hey, I skipped the teenage
years. Now, I'm just a grownup."
[266]
That is probably difficult.
[268]
And for Nikola that turned out
to be very, very difficult.
[272]
As an example, Elon Musk
got into trouble with Tesla.
[274]
He did one tweet about
delisting the company.
[278]
He should not have done that.
[280]
They almost had to throw him out of Tesla,
[282]
but they made some kind of deal with SEC.
[284]
So, one tweet and you could
be in massive trouble.
[287]
So, you have to be very, very
careful with what you say
[291]
and do as a listed company.
[293]
Tesla knows this.
[295]
I'm not sure Nikola knows this.
[297]
Okay, so now they could list it.
[298]
Let's have a look at the
stock price here, right?
[300]
So, they start from the listing.
[302]
Nothing really happens
until this merger happens
[306]
and things start going up slowly.
[308]
They started around $10,
[309]
in May things start going a bit crazy.
[312]
They hit around 30
bucks, you know, not bad.
[314]
They just triple the value.
[316]
They go down a little bit and
then they jumped like crazy.
[319]
They get to almost $80 per share.
[322]
This company at this point
is worth I don't know,
[325]
probably over 30 billion.
[327]
So, the company that was
worth, who knows what?
[329]
Maybe nothing, a few months
earlier is now worth 30 billion.
[334]
This is also when they
start getting scrutiny
[336]
and people start looking at
Nikola, what is going on?
[339]
How did this rocket ship just
go crazy in such a short time?
[344]
Yes. So people really start
scrutinizing the company.
[346]
And specifically there's something called
[348]
Hindenburg Research.
[350]
They release a report in September of 2020
[354]
with all kinds of accusations.
[356]
Let's have a look at some
of the stuff in there
[358]
and what all other people have found.
[360]
Just be aware, Hindenburg Research
[362]
is what we call a Short-Seller
[363]
which means they make money
as the price goes down.
[367]
So, they have a clear
interest in finding stuff
[369]
on the company that doesn't look good.
[371]
So, the stock price goes
down. That's their job.
[373]
They're transparent around that.
[375]
But just have that in mind,
whatever you hear about Nikola
[378]
and the Hindenburg Research.
[380]
The core of the report is
that they accuse Nikola
[382]
of misleading investors in a bad, bad way.
[385]
Let's have some examples
of what they have found,
[387]
and others have found on this.
[389]
In 2016, they present a
truck and they keep talking
[393]
about this fully working truck.
[396]
Like Milton keeps saying that
it's a fully working truck.
[400]
It has now been four years.
[403]
And, if that truck was
fully working, where is it?
[406]
And he even goes like, "All in on this."
[408]
He just keeps saying fully working.
[410]
- That exactly in our truck, right?
[411]
You'll able to see it
when you get in the truck
[412]
later tonight.
[413]
You'll see it up on the screens
[414]
are fully functioning screens
[415]
but this thing fully functions and works,
[416]
which is really incredible.
[417]
There's a fully functioning vehicle,
[420]
which is really incredible.
[420]
You can go through it.
[421]
We can change out pretty
much everything we want.
[424]
All the temperatures.
[424]
I mean, this is a fully
functioning vehicle.
[427]
It's not just a pusher.
[427]
- [Heini] Every time he
keeps repeating something,
[429]
there's something fishy around it.
[430]
At least it is 2020 now, that was 2016.
[434]
If it was fully working, shouldn't
you be selling it by now?
[437]
Okay. It gets better in
2018, Nikola releases
[441]
this amazing video with
the truck in motion.
[445]
Look at it go. I mean, it's flying.
[448]
It looks like a fantastic truck.
[450]
Ready to go off the assembly line,
[451]
ready for everyone to buy.
[453]
There is a tiny problem though.
[455]
The report claims that they
push this truck up a hill
[459]
and then rolled it down the hill,
[461]
and that's why it's in motion.
[463]
There might not be any engine.
[464]
It's definitely not
going on its own power.
[467]
It's just rolling down the hill.
[469]
The thing about this story that Nikola,
[470]
hasn't said it's not true.
[472]
They have had a chance to come out
[473]
and say this is not true.
[475]
So, they've basically
confirmed that they pushed
[478]
that truck up the hill rolled it down,
[480]
changed the angle of the cameras a bit,
[483]
so it looks like it isn't going downhill
[485]
but basically it's going downhill.
[487]
I mean, this is just crazy.
[489]
A company claiming this kind of stuff
[491]
is just not being truthful.
[494]
Okay. One more of these stories,
[495]
several claims that their
factory is off the grid
[498]
and they generate so much solar power.
[501]
Obviously, if someone takes
a look at satellite photos,
[504]
guess what?
[505]
No panels, how do you run
a factory with solar power
[508]
if there are no panels?
[509]
And this just keeps going.
[511]
There's just too many
things here that aren't true
[513]
or they can't give an
explanation on what happened.
[516]
The thing about something like this,
[517]
this is not just a founder
[518]
trying to sell any future value here.
[521]
When it's a listed company,
[523]
these people are making
massive amounts of money.
[527]
And this is sort of Trevor
Milton starts getting real,
[529]
real attention and scrutiny.
[530]
He keeps talking the stock up
[532]
and he becomes richer
and richer in real money.
[537]
He gets even more attention
[538]
when he buys the most
expensive house in Utah,
[542]
a $32 million house.
[544]
This house is just massive.
[546]
Okay. I could keep going with
these stories about Nikola,
[550]
but let's have a look
at how it all unravels,
[552]
come September, and things
start falling apart.
[555]
The Hindenburg reports come out
[556]
with all these wild accusations,
[559]
which they could be true or not true,
[561]
but they can't bring a good answer.
[563]
I mean, if they're 30 accusations
and you only get an answer
[567]
to 10 of them, what about the other ones?
[569]
To make matters worse and
somebody's good at making matters.
[571]
Just really, really good at
making matters, even worse.
[575]
Trevor comes out on social media,
[577]
right after the report comes out and said,
[579]
"We'll be right back within hours
[581]
with response to every single question."
[584]
And then what happens? You
know, silence, nothing happens.
[588]
They do not bring a good response
to all of these questions.
[592]
Then you have to assume the things
[593]
that you don't respond to.
[595]
They're probably true.
[596]
The truck being pushed up
and then rolling downhill,
[599]
probably true.
[600]
That goes on for a few days.
[602]
And the next thing we
hear is that Trevor Milton
[604]
is out of Nikola. I mean, he is Nikola.
[606]
So, that in itself is interesting,
[609]
but can they save this company?
[610]
That's a good question.
[612]
I personally, I don't think so.
[614]
I'm just not sure there's
enough in this company. I think.
[617]
And that's what puzzles me at this point.
[619]
Again, this is just
speculation from my side.
[623]
I'm not giving anyone advice on anything,
[624]
but I just can't believe that this company
[626]
is still worth now $7 billion.
[629]
Why are people still buying this stuff?
[630]
We don't think a lot of what's said
[632]
about this company is true.
[633]
Time passes on, end of September.
[636]
Suddenly Trevor Milton,
again, he was Nikola.
[639]
He was also Mr. Social media.
[640]
He disappears from social media,
[642]
gone under the radar, not a word.
[645]
So, now everyone's just
waiting, what's next here.
[647]
But again, big company,
as of end of September
[650]
is still worth $7 billion
that could change quickly.
[654]
But that's where we are right now.
[655]
You know what Trevor?
[656]
I'll give you a compliment before we go.
[658]
Your big idol, Elon Musk,
[660]
obviously, he's better at
building, basically everything
[663]
rockets, cars, he's actually
done all these things.
[666]
You name your company,
Nikola, just like Tesla.
[669]
Again, weird.
[670]
But I will say one thing, maybe
it's your Mormon background
[672]
but you are a good preacher man.
[674]
You are incredibly good on stage
[676]
and much better than the Elon Musk.
[677]
So, here's a compliment for you.
[679]
You are a lot better on stage than Elon.
[682]
So, at least you can take that with you.
[684]
All that said, the core
problem here is that
[686]
we have these companies
that suddenly fall apart.
[689]
We've seen Theranos, which
probably was a fraud.
[691]
We've seen WeWork, which
wasn't well-managed,
[694]
let's put it there that
way, I did a video on it.
[696]
You should definitely watch it.
[698]
Crazy, crazy story.
[700]
But there's a difference here.
[702]
Theranos and WeWork
were private companies.
[705]
Nikola is not a private company.
[708]
Nikola is a listed company.
[710]
They are on NASDAQ, governed by the SEC,
[714]
we're supposed to believe everything
[716]
these public companies say.
[718]
I think there's a major
problem for NASDAQ and the SEC,
[721]
how can a company suddenly
be worth $30 billion
[724]
with no product, no revenue, no nothing?
[728]
That's all we have today.
[729]
Thank you very much for watching,
[730]
please like, and subscribe,
[731]
if you enjoy this type of
content, thank you very much.
[734]
(upbeat music)
Most Recent Videos:
You can go back to the homepage right here: Homepage