Nikola Rejects Dissident Nominees Amid Legal Battle With Former Chairman Trevor Milton - What's Going On?

Nikola Corporation NKLA shares are trading higher in the premarket session on Friday.

Nikola said today that its board of directors had rejected a slate of five dissident nominees proposed by an entity controlled by former Executive Chairman Trevor Milton for election as directors.

Milton was criminally convicted of one count of securities fraud and two counts of wire fraud related to the company and was sentenced to 48 months in prison, followed by supervised release for three years. 

On October 20, 2023, Milton was found liable in an arbitration with the company, resulting in an award to the company of $165 million plus interest, which includes a $125 million settlement with the Securities and Exchange Commission from December 2021. 

This judgment remains unpaid, and Nikola said it is vigorously seeking all legal avenues to recover monies owed to the company by Milton.

Earlier this week, Nikola said it opened its first HYLA hydrogen refueling station in Southern California, representing the latest phase in Nikola’s commitment to providing hydrogen refueling solutions for Class 8 trucks.

The new station will be capable of fueling up to 40 Nikola hydrogen fuel cell electric Class 8 trucks on a daily basis and is part of the company’s push to have nine stations ready by the end of the second quarter. 

As Nikola continues to suffer harm created by Milton’s business decisions from over three years ago in his role as Founder and Executive Chairman, the company said that it opposes the nominations made by Milton and will disclose its director nominees when its proxy statement is filed with the Securities and Exchange Commission.

Last month, Baird analyst Ben Kallo initiated the coverage of the company with an Outperform rating and a $2 forecast.

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Price Action: NKLA shares are trading higher by 1.07% to $0.7163 premarket on the last check Friday. 

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