Nikola Slumps as U.S. Justice Department Said to Make Inquiries

Nikola Corp. fell in New York premarket trading Wednesday after the Financial Times reported the U.S. Department of Justice has joined inquiries into claims against the truckmaker in a short seller’s report.

Nikola slumped 7.4% to $30.40 at 4:20 a.m. New York time, erasing Monday’s rebound that followed the company’s detailed rebuttal to a Sept. 10report from Hindenburg Research.

Bloombergreported Monday the U.S. Securities and Exchange Commission is looking into the allegations of fraud Hindenburg made against Nikola. The Department of Justice has also been making inquiries on the matter, the Financial Timesreported Tuesday, citing unidentified people familiar with the conversations.

The stock has been volatile recently, following an announcement Sept. 8 ofan equity and manufacturing deal withGeneral Motors Co. and the short-seller’s accusation of “deception.” Nikola has pushed back on the allegations, accusing the short seller of making misleading statements that were designed to manipulate its shares.

Investors are focusing too much on Nikola’s past, as its fortunes depend more on a longer-term goal of becoming the preeminent supplier of hydrogen for fleets of vehicles, Jeffrey Ubben, a top shareholder and board member at the firm,said in a phone interview Tuesday.

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