The sudden departure of Nikola Corp. founder Trevor Milton as the company’s executive chairman amid investigations into fraud allegations prompted the company’s share prices to take a steep dive Monday, but not everyone sees the latest developments as cause for panic.
New York equity research firm Cowen Inc. said Monday that Milton’s resignation is in the best interest of the Phoenix-based zero-emissions vehicle maker, singling out his “prolific use” of Twitter and Instagram to do battle with critics as examples of Nikola’s initial lack of preparedness for its role as a public company starting in June.
“We see the departure of Mr. Milton from the equation as a positive,” Cowen wrote in a Monday report. “Hopefully, this will minimize the drama in the weeks and months ahead as the company moves forward with the development of its all-electric and fuel cell Class 8 trucks and related infrastructure as well as it works to close the deal with General Motors.”
Nikola on Sept. 8 announced a partnership in which GM would build Nikola’s Badger pickup as well as supply fuel cells and batteries.
J.P. Morgan agreed with the Cowen assessment, issuing a report Monday that said Steve Girsky, a former GM executive who came on board from VectoIQ during the reverse-merger that made Nikola public, will be better suited as executive chairman as Nikola enters the execution phase in its development.
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