Is Nikola Motors The Next Theranos?
Is Trevor Milton the next Elizabeth Holmes? Well, what the two irrefutably have in common is a wild imagination.
Trevor Milton’s Nikola was never about delivering. It was about following the trope of the underdog to its Hollywood conclusion: confetti falls from the air, music swells as the camera pans over a happy crowd. Then as the confetti clears, the final shot is the driveway of Trevor Milton’s $32.5 million mansion. That’s the end of the underdog’s trope — that’s the reward Trevor needed to tie it all up in a neat bow. Real hydrogen powered trucks be damned. Let me explain.
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Founder Trevor Milton has resigned as Chairman of Nikola Motors (NASDAQ: NKLA) and has departed the company effective immediately.
Though he will still be one of the company’s largest shareholders, he will no longer have a say in company management. It’s rumored to be Milton’s decision, a move to protect the company and his investment. Milton owns approximately 82 million shares or 20% of the company, worth about $2.8 billion dollars.
Milton is the founder of Nikola Motors, a company founded as a Tesla adversary — with a vision of hydrogen powered trucks. His public comments on the potential of hydrogen powered trucking and the network he was intent on building often reached far out of the realm of the imaginable, leading people to question what goes on behind the scenes of the embattled company.
Investors, partners, suppliers, and industry giants that partnered with Nikola saw the opportunity and grand vision of the prospect of hydrogen powered trucking. If successful, this would lessen our carbon footprint by a large margin.
Before the company went public, it was a relatively unknown entity. After a reverse merger IPO or SPAC offering in June, Nikola came out with a valuation that was higher than Ford’s — despite having never mass produced a product, and the only revenue coming from solar panel installation services.
It’s hard not to raise an eyebrow at the series of events that have unfolded involving Milton and Nikola. But let’s bring the dial back a few notches for a moment.
What do we know about Trevor Milton’s professional history?
Well, we know that Trevor Milton’s resume isn’t one to write home about. In fact, there’s not much on there except for two jobs he held, the first for close to four years and the second job for only six months. What was he doing prior to 2010? He didn’t finish school — not just college, he also did not finish high school. That doesn’t need to be a problem in itself, but itcertainly spurs the question of what he was doing until he was 28. He’s a Mormon, could it have been an extended mission?
In late 2019 he purchased a 32.5-million-dollar mansion, a residential purchase that is the largest to date in the state of Utah. Where did the money come from? With the information we have available on his LinkedIn page, it seems as though he was a salaried employee for 4 years. How did he raise the funds for the not-so-humble abode? From raising capital for a ‘soon to go public start up’? Was his salary that high, even though the company is in its startup phase? That doesn’t seem in-line with the most successful entrepreneurs that began in garages, such as Jeff Bezos and Bill Gates. He further applied and received PPP funds meant for businesses that are small — not publicly-traded entities with access to the capital markets.
It’s safe to say the SEC and DOJ have some work to do. But what drove this unassuming regular guy to become embroiled in a developing financial scandal? Well, the motivation behind Milton’s actions is still up for debate. I have my theory. I call it:
Trevor’s Amazing One-Horse Race.
Let’s set the stage. Trevor is living in Utah. He starts his first alternative energy venture, a vehicle company called dHybrid, Inc. Some time later in mid-2012, the company sued by Swift Transportation. Why? They couldn’t deliver on the truck-conversion deal they made. Eventually, dHybrid was purchased by none other than Worthington Industries in 2014, hence Trevor’s six month stint under the ownership before diving into Nikola: the product of latent dHybrid resentment.
“So,” Trevor thinks to himself while lying in bed after a long miserly day as an associate of Worthington Industries with his laptop open. “It’s not fair. dHybrid was my baby and now it’s just..it’s been sold out. This is unacceptable.” Trevor identifies an injustice. It must be rectified.
Who stands in his way? Who must he transcend?
No one other than Elon Musk. He’s got a bone to pick and he will pick it publicly and flamboyantly.
What is the Yin to Elon’s Tesla? Ding, ding, ding — it’s Tesla’s first name: Nikola. The company name functions as a provocateur on its own; designed to spark associations to Tesla and Musk. Musk does not seem interested in Milton, nor in Nikola. That does not mean Milton ever stopped trying to get his attention.
Milton hasn’t been shy about his one-horse race either, once saying that
“There’s very few people that can out-Elon Elon in this world, and I’m one of them. Nikola is the pioneer heavy-duty trucking and Tesla’s just really following in our footsteps.”
And he’s been at this since 2018 — when Nikola sued Tesla, accusing them of a baseless patent infringement that was found to have no merit. It was for publicity. Milton crafted the image of the underdog, challenging a seemingly bulletproof topdog in the industry.
It created a small but mighty and infectious crowd of Nikola stans — infiltrating forums and building the air of anticipation around Nikola’s IPO. Some people made a lot of money. Trevor Milton did. But it was never about truly delivering what he has promised to create. It was about following the trope of the underdog to its Hollywood conclusion: confetti falls from the air, music swells as the camera pans over a happy crowd. Then as the confetti clears, the final shot is the driveway of Trevor Milton’s $32.5 million mansion. That’s the end of the underdog’s trope — that’s the reward Trevor needed to tie it all up in a neat bow. Real hydrogen powered trucks be damned.
