Hindenburg Research, the short seller that successfully beat down Nikola Corporation (NASDAQ: NKLA) share price by 40%, fired more shots at the beleaguered electric truck startup on Tuesday. Nikola refused to engage amid a report of a possible Securities and Exchange Commission (SEC) inquiry.

Nikola, which hired crisis communications firm Joele Frank, declined to respond to questions about Hindenburg's renewed attack or a Bloomberg report quoting unnamed sources that the SEC was investigating Nikola.

The SEC declined to comment, spokesman Christopher Carofine wrote in an email to FreightWaves on Tuesday.

On Monday, Nikola hinted at an SEC inquiry. It said it had contacted the agency on Friday — a day after the 67-page Hindenburg report was published accusing Nikola of years of lies and deceit. A second Nikola statement issued Monday evening said it welcomed SEC involvement.

That was it for Nikola. On Tuesday, it issued a brief statement.

"We are not going to comment on rumor or speculation," Nikola said. "When we have something to disclose, we will."

Founder goes quiet too

Operating in crisis mode, Nikola also quieted the social media accounts of founder and Executive Chairman Trevor Milton. He has aggressively and sometimes profanely responded to critics and short sellers on Twitter. His most recent tweet Monday said Nikola's response to Hindenburg "is out and we are focused on delivering."

Part of Nikola's challenge even before the Hindenburg allegations was that it is at least a year away from having electric trucks on the road and generating meaningful revenue. That has led to negative posts from detractors, many of them fans of Tesla Inc. (NASDAQ: TSLA), which became the world's most valuable automaker with its stock appreciation this year.

Nikola and Tesla named their companies for the first and last names of 19th century inventor Nikola Tesla. Nikola became a public company in June following a reverse merger with special purpose acquisition company VectoIQ.

Nikola's business plan calls for battery-electric Nikola Tre cabover models to be produced by the end of 2021 in a joint venture with IVECO, a subsidiary of CNH Industrial N.V. (NYSE: CNHI). The industrial conglomerate invested 0 million in Nikola in September 2019, including the use of the IVECO factory in Ulm, Germany.

German-built trucks also will be exported in kits and assembled at a Nikola plant under construction in Coolidge, Arizona. Republic Services (NYSE: RSG) placed a record order in August for 2,500 Tre models to be configured as refuse haulers. Nikola plans to build hydrogen-powered Class 8 trucks in Arizona beginning in 2023.

It claims 14,000 orders for those trucks worth $10 billion in revenue. But none of the orders are binding.

The GM deal

A week ago, Nikola and General Motors Co. (NYSE: GM) said GM would become an 11% owner in Nikola and build the Badger electric pickup truck on the same platform as a coming GM electric pickup.

GM also will provide its Ultium batteries and Hydrotec fuel cells for Nikola's Class 8 trucks. Nikola shares rose more than 40% on the day of the announcement. By Monday, shares retreated as low as the upper $20s before recovering to close at $35.79.

GM CEO Mary Barra said Monday GM did all due diligence on the Nikola deal, rebutting Hindenberg's claim that GM "did not do its homework."

Nikola shares traded more than 7% lower on Tuesday afternoon.

Renewing the attack

Following Nikola's partial rebuttal of its allegations on Monday, Hindenburg called the response "a tacit admission of securities fraud."

"We included 53 questions at the end of our report that we believe shareholders deserve answers to," Hindenburg said on its website Tuesday. "The company promised a full point-by-point rebuttal, but then only responded to 10 of our questions."

Nikola's response appeared to cover 15 of Hindenburg's claims, dismissing the rest. One that has gotten significant attention involved whether a fuel cell prototype Nikola showed in 2017 could run under its own power. Milton claimed it could. But Hindenburg followed up on a Bloomberg story in June. Both pointed to misleading statements by Milton.

MIlton was so incensed by the Bloomberg report that he threatened to sue reporter Ed Ludlow and banned Bloomberg from future Nikola activities. Whether a suit was ever filed is unclear. Ludlow has participated in Nikola online media events since his story.

Nikola claimed it never said the prototype moved under its own power and that a television ad showing it moving never claimed it was running independently. Hindenburg said the truck was a "pusher" and was filmed descending a grade that gave the impression it was running.

"It was never described as ‘under its own propulsion' or ‘powertrain driven,'" Nikola, said on Monday. Nikola, which was a private company at the time, said investors at the time knew the capabilities of the prototype. It called the 3-year-old video "irrelevant except for the fact that the short seller is trying to use it for its main thesis."

Giving and buying shares

After contacting the SEC on Friday, Nikola suggested its proactivity could make the SEC an ally. A Bloomberg report published after the market closed Monday quoted unnamed sources saying the agency was looking into the matter, adding that nothing could come of it.

Milton hated the Hindenburg attack, which he called a "hit job." But he responded to the freefall in share price by purchasing 41,400 shares in four transactions on Monday at prices ranging from $30.10 to $33.59, according to an SEC S-4 filing.

On Aug. 26, Milton gave 6 million of his personal shares to longtime employees. He followed up last week by giving 1 million personal shares to 350 current employees with the only stipulation that they stay at the company for three years.

Related articles:

Nikola rebuts short seller's screed, shares rebound

Short seller publishes blistering takedown of Nikola

Minting millionaires and building buzz at Nikola

Click for more FreightWaves articles by Alan Adler.

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