Electric vehicles have been one of the stock market’s hottest trends pretty much since the Tesla Roadster hit the market in 2008.
Four years later, the company went public, officially making Elon Musk a billionaire and opening a floodgate of imitators all doing their best to ride the hype train straight into the three comma club.
The worst of them by far came courtesy of Trevor Milton, the founder and former chairman of Nikola Corp. (Nasdaq: NKLA).
But it wasn’t just because the company’s name or reported business plan was a ripoff of Tesla Inc. (Nasdaq: TSLA)…
It was that the whole operation was a complete fraud from the outset.
Through it all, I’ve been right here on Future of Wealth, sounding alarm bells and shining a light on the company’s shady business for over a year…
And now Milton’s problems are finally coming home to roost over the Nikola fraud charges…
What Nikola Fraud Charges Mean for EVs
Thursday, a federal grand jury charged Milton with three counts of criminal fraud. In addition, the SEC has asked the court to permanently bar him from acting as an officer of a public company ever again over the Nikola fraud charges.
Shares were down as much as 15% on Thursday from its previous close.
The company’s problems became public after Hindenburg Research published a short report on Nikola in the Fall of 2020.
The report said the company made several false claims of using proprietary technology that didn’t exist, and that certain promotional events surrounding its first semi-truck prototype needed to be staged because it didn’t work under its own power.
That’s been on-brand for the company so far, as it has yet to deliver any commercially available products to the market.
While the Nikola fraud charges are unfortunate for investors, these are the growing pains of a young industry.
The good news is this is a trend that isn’t going away anytime soon. Even better, there are plenty of reputable companies in the EV and alternative energy space with room to grow.
Stocks like Plug Power Inc. (Nasdaq: PLUG), NIO Inc. (NYSE: NIO) and even traditional automakers like Ford Motor Co. (NYSE: F) and General Motors Co. (NYSE: GM) all have available commercial products that can give traders exposure to EV market growth.
Let’s talk about the Nikola fraud charges. Check out this video from back in December where I call out NKLA on its BS and made the case for NIO. Don’t forget you can follow me @LanceIppolito on Twitter, Instagram and our YouTube channel for more trading insights and tips. And as always, you can find me right here talking stocks and options trading — and printing money — on WealthPress.com!
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