(Bloomberg) -- Nikola Corp. shares fell as much as 10.4%, resuming its decline as investors reacted to word of a U.S. Securities and Exchange Commission investigation into allegations it deceived investors about its prospects.
Bloomberg News reported late Monday the SEC is examining the electric-truck maker to assess the merits of a short-seller's report last week raising questions about its business practices. Shares of Nikola had rallied earlier Monday after it issued a more detailed denial of allegations laid out in the report from Hindenburg Research on Sept. 10.
The stock pared an early decline Tuesday, trading down 5.6% to $33.77 as of 9:57 a.m. in New York.
The stock has been volatile this past week after the announcement Sept. 8 of an equity and manufacturing deal with General Motors Co. and the short seller accusation of “deception.” After the market closed Sept. 14, Bloomberg, citing people familiar with the matter, reported that the SEC is looking into the allegations from Hindenburg to determine whether Nikola may have violated securities laws. The short seller had called Nikola an “intricate fraud” that, among other things, overstated the capabilities of its earliest test trucks.
Nikola has pushed back, accusing the short seller of making misleading statements that were designed to manipulate its shares. The company has encouraged the SEC to get involved, saying it reached out to the agency to discuss its issues with the Hindenburg report.
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