THE 30 BILLION DOLLAR IDEA!! WALL STREETS BIGGEST FRAUD | Trevor Milton | NIKOLA MOTORS | PART 1 — Transcript

Full transcript

1. 0:00so what is up youtube in today's video
2. 0:01and over the next few videos we're going
3. 0:03to be talking about one of the bigger
4. 0:04frauds in recent history which is nikola
5. 0:06motors but this is a company that could
6. 0:08be changing things around now but we
7. 0:10will be talking about that in the next
8. 0:12video in today's video we're going to be
9. 0:14talking about the start of nikola motors
10. 0:15and how the company actually went public
11. 0:17now nikola was founded in 2016 by trevor
12. 0:20milton and is named after the famous
13. 0:21scientist nikola tesla just like the
14. 0:23company tesla is and another reason for
15. 0:26this name is to always get comparisons
16. 0:27with tesla so before we actually look at
17. 0:29the history of nikola let's first look
18. 0:31at the history of trevor milton because
19. 0:33a lot of the fraud allegations behind
20. 0:35nicola is because of the founder trevor
21. 0:37milton so before trevor milton started
22. 0:39nikola he and many other ventures and
23. 0:41one of them is a e-commerce company
24. 0:43called u-pillar so essentially uh uh
25. 0:45trevor milton sold this idea to many
26. 0:47investors and he said that u-pillar will
27. 0:49be only second to ebay and a lot of
28. 0:52investors trusted him and they invested
29. 0:54in this company but soon after u-pillar
30. 0:56did go to zero soon after trevor milton
31. 0:58did start a company called dehybrid and
32. 1:00this was a company that wanted to reduce
33. 1:02fuel costs by modifying a trucks and
34. 1:04making them run on diesel natural gas so
35. 1:06this company got a two million dollar
36. 1:08upfront payment from a company called
37. 1:09swift and this was for research and
38. 1:11development and to install the
39. 1:12technology on the first batch of trucks
40. 1:14however in a 2012 lawsuit swift claimed
41. 1:17that d hybrid spent some upfront money
42. 1:19on unrelated spending including personal
43. 1:21use by unnamed officers or directors and
44. 1:24then there's this whole huge counter
45. 1:26lawsuit and nothing really happened and
46. 1:28both companies decided to end the
47. 1:30litigation now a few years later trevor
48. 1:32milton was able to sell this company for
49. 1:34a few million dollars which he did use
50. 1:35to fund nicola but from these two
51. 1:37different businesses he owned i can
52. 1:39understand that trevor milton does have
53. 1:40a history of overselling his business
54. 1:43and over promising investors so now that
55. 1:45we talked about trevor milton's past
56. 1:47before nicola let's actually talk about
57. 1:49the start of nicola so nikola
58. 1:50corporation was started in 2014 salt
59. 1:52lake city utah and essentially they
60. 1:54wanted to make zero emission trucks so
61. 1:56this included semi trucks that were run
62. 1:57on hydrogen and electricity so tesla
63. 2:00semi trucks are run on our battery
64. 2:02electric vehicles and nikola also wanted
65. 2:04to offer one type of vehicle like this
66. 2:06but they also wanted to offer hydrogen
67. 2:09fuel cell vehicles and this is what they
68. 2:10wanted to do differently they wanted to
69. 2:12bring in hydrogen infrastructure into
70. 2:14the automobile industry so until 2016
71. 2:17nikola didn't really show audiences much
72. 2:20they kind of just kept working on
73. 2:21different concepts on how their trucks
74. 2:23should look and how it should be built
75. 2:24but in 2016 they had this huge event
76. 2:26where nikola actually showed off its
77. 2:28first truck which is the nikola one and
78. 2:30it's an electric semi truck now this was
79. 2:32a pretty big event like i said
80. 2:34previously and i do believe it took
81. 2:35place in utah and there were many media
82. 2:37companies there and a lot of other
83. 2:39corporations including the governor of
84. 2:41utah and during this whole time trevor
85. 2:43milton was talking about the truck how
86. 2:45good it is and how much better better it
87. 2:47is from diesel or other existing trucks
88. 2:50and the whole press conference or the
89. 2:51whole reveal he was saying it was a
90. 2:53functional truck however it came out
91. 2:55later that this was not a functional
92. 2:56truck at the time and the nikola
93. 2:57management team was essentially screwing
94. 2:59back in loose pieces so again trevor
95. 3:01milton did lie to the audience about how
96. 3:03functional the truck is and essentially
97. 3:05he was just trying to sell the idea to
98. 3:07more investors so from this we could see
99. 3:09that trevor milton does hype up his
100. 3:10ideas and his products uh a lot and now
101. 3:13we'll be looking at what happened to
102. 3:15nikola after this so like i said before
103. 3:17this truck was unveiled in 2016 and
104. 3:19trevor milton and his team basically
105. 3:21said that they designed their whole
106. 3:22truck themselves and so they got six
107. 3:24design patents for the truck and then in
108. 3:262017 tesla unveiled this uh tesla semi
109. 3:29truck and there were a lot of design
110. 3:31similarities between the tesla tesla
111. 3:33semi and the nikola one so nikola
112. 3:35decided to sue tesla for two billion
113. 3:38dollars for copying their designs even
114. 3:40though nikola had a patent now this was
115. 3:42an extremely long going uh court case
116. 3:44and actually lasted till now
117. 3:46and essentially what happened is nicola
118. 3:48looked like they're gonna win but then
119. 3:49tesla came out saying nicola actually
120. 3:51bought uh their designs from another
121. 3:54company in another country and this
122. 3:56completely threw off the narrative for
123. 3:58nikola because they never stated this in
124. 3:59their court case and said they claimed
125. 4:01they made the design so essentially
126. 4:03nikola did lie and i think the case is
127. 4:06still ongoing and nothing really
128. 4:08happened with this also in 2018 they
129. 4:10showed us uh nikola one in action
130. 4:12however there was a lot of controversy
131. 4:14around the truck actually moving which
132. 4:16we will be talking about a little later
133. 4:18so now let's talk about nikola actually
134. 4:20going public and a few of the other uh
135. 4:23vehicles they wanted to release and so
136. 4:25two years after uh nikola actually
137. 4:27showed the nikola one in action they
138. 4:30went public on stock market so
139. 4:31essentially they merged with a spac
140. 4:33called vecto iq spac is a special
141. 4:36purpose acquisition corporation
142. 4:38especially a blank check company that
143. 4:39needs to choose another company to take
144. 4:41public and so vector iq chose nikola
145. 4:44mark corporation and after both uh
146. 4:46companies essentially went into the
147. 4:47merger negola went public so in march of
148. 4:502020 nicola and vector iq came into the
149. 4:52agreement where both of these companies
150. 4:54would merge and nikola would be listed
151. 4:56on the nasdaq and essentially their
152. 4:58valuation was 3.3 billion dollars but
153. 5:00this was if nikola share price was 10
154. 5:03now during uh now right after this
155. 5:05agreement there's actually an investor
156. 5:06presentation which talked about nikola's
157. 5:08plans and their future revenue
158. 5:10projections so in this they talked about
159. 5:12the timeline 2015 was when they were
160. 5:14founded and essentially they said in
161. 5:162019 they unveiled fully operational
162. 5:19nikola to alpha trucks however this is
163. 5:21false and this was proven by a hidden
164. 5:23berg report which basically said both
165. 5:25the prototypes they showed were not
166. 5:27fully functional and then they also said
167. 5:29that they have 14 000 in reservations
168. 5:31for their fuel cell electric vehicle and
169. 5:33a lot more for their electric vehicle
170. 5:35now essentially what you have to
171. 5:36understand is reservations actually cost
172. 5:38zero so essentially it was free to
173. 5:40reserve and it would never actually
174. 5:42amount to actual revenue so in this
175. 5:44presentation before nikola actually went
176. 5:46public they basically said they spent a
177. 5:48tons of money researching and developing
178. 5:50the nikola one and two and they're gonna
179. 5:52take this technology and put it into a
180. 5:53pickup truck and they'll make a pickup
181. 5:55truck called the nikola badger which is
182. 5:56both a fuel cell electric vehicle and
183. 5:58battery electric vehicle so after
184. 6:00investors saw this they're extremely
185. 6:01excited and a lot of people started
186. 6:03buying the vector iq stock because if
187. 6:05they bought vector iq then they would
188. 6:06eventually own nicola and essentially
189. 6:08the management also said they would open
190. 6:10up reservation for the nikola badger
191. 6:12soon and it did open once the merger
192. 6:15actually happened so the merger happened
193. 6:17in june and the badger reservations also
194. 6:20happened in june like i said before they
195. 6:22also talked about revenue and profit
196. 6:23projections so essentially the
197. 6:25management said they're expecting to do
198. 6:26150 million dollars in revenue 2021 then
199. 6:30300 in 2022 1.4 billion dollars in
200. 6:33revenue 2023 and 3.2 billion dollars in
201. 6:362024. so this investor presentation came
202. 6:39in march and vector iq and nikola
203. 6:41actually merged together in june so
204. 6:44essentially the ticker symbol went from
205. 6:45vt iq to nkla
206. 6:48and the stock price shot up in a huge
207. 6:50weight before and after the merger so in
208. 6:53the initial parts of the merger vt iq
209. 6:55stock was trading at 10
210. 6:56and that implied a market cap of close
211. 6:58to 3.3 billion dollars for nikola
212. 7:01however after the merger there was a lot
213. 7:03of hype in the stock and the stock at
214. 7:05some point in the pre-market went to as
215. 7:06high as like 80
216. 7:08and eventually like started
217. 7:09consolidating at 65 before it crashed in
218. 7:12a huge way this means that nikola almost
219. 7:14had a market cap of 30 billion dollars
220. 7:17think about that company with no revenue
221. 7:19and not really any products to show for
222. 7:21went to as high as 30 billion dollars
223. 7:23because the ceo was able to sell the
224. 7:25idea that this is the next big thing so
225. 7:27from here the stock started to cool off
226. 7:29that's probably because people started
227. 7:31taking profits and from here nikola
228. 7:33actually made a deal with general motors
229. 7:35but then there's this huge short seller
230. 7:37report by hindenburg research that
231. 7:39basically had a lot of allegations on
232. 7:41nikola like they never had a functioning
233. 7:43vehicle and all their shows were just a
234. 7:45non-functional vehicle and the one time
235. 7:47they showed a truck driving was it was
236. 7:49just actually strolling down a hill
237. 7:51however we're going to be talking about
238. 7:53all this in my next video but in this
239. 7:55video you should have understood the
240. 7:56timeline of nikola there started in 2014
241. 7:58by trevor milton the first major event
242. 8:01was them showing off the nikola one
243. 8:02where they said it was fully functional
244. 8:04but it really wasn't and then they
245. 8:06showed the nikola 2 in 2018 and they
246. 8:09said that was also fully functional but
247. 8:11it really wasn't it was just rolling
248. 8:12down a hill and then the investor
249. 8:14presentation where the management hyped
250. 8:15up their company and their product
251. 8:17talking about the great technology they
252. 8:18did have and also they're talking about
253. 8:20their pre-orders which would eventually
254. 8:23amount to three billion dollars in three
255. 8:25years so they expected to go from zero
256. 8:27to three billion dollars in three years
257. 8:29by building out fully functional
258. 8:30hydrogen infrastructure as well and
259. 8:32honestly this is laughable for companies
260. 8:34they didn't really have any working
261. 8:36products at the time it really just
262. 8:37seemed like they're trying to sell their
263. 8:38company to investors to pump up the
264. 8:40valuation but then the ceo and the
265. 8:42management can get out which is
266. 8:44essentially what happened but we will be
267. 8:46talking about that in the next video
268. 8:47this is just the start of the end for uh
269. 8:50trevor milton run nicola we're gonna be
270. 8:52talking about the rest in the next two
271. 8:53videos so if you guys did enjoy the
272. 8:55video please do leave a like and
273. 8:56subscribe also comment down below videos
274. 8:58you'd like to see and thank you for
275. 9:00watching