Nikola’s founder steps down

Nikola Corp. faces an uncertain future following the sudden departure of its founder and chairman in the wake of regulatory investigations and a collapse of its stock price, even as partner General Motors Co. says it won’t abandon the electrictruck start-up.

Trevor Milton stepped down as executive chairman effective immediately and was replaced by Stephen Girsky, the former GM vice chairman who oversaw Nikola’s stock listing and helped broker their partnership. Nikola’s shares — already reeling from claims of deception leveled by short seller Hindenburg Research — dived 19.3% on Monday.

“Nikola is truly in my blood and always will be, and the focus should be on the company and its worldchanging mission, not me,” Milton said in a statement. “So I made the difficult decision to approach the board and volunteer to step aside.”

The resignation marks a remarkable fall from grace for Milton, a 39-year-old college dropout whose fortune soared when he took Nikola public through a reverse merger in June. He agreed to relinquish stock units that as of Friday’s close were worth about $166 million and gave up his board seat at Nikola, which has yet to generate any meaningful revenue.

The shake-up also raises questions about Nikola’s fate without its charismatic founder, who was the public face of the company and the architect of its key strategic projects.

Analysts said Nikola had its work cut out for it to rebuild its credibility with Wall Street.

“Trevor stepping down voluntarily at Nikola will be perceived by the Street as a major near-term gut punch for the company’s lofty EV ambitions as he plays a key role strategically in driving the company’s vision,” Dan Ives, an analyst at Wedbush Securities with a “neutral” rating on the stock, said in a note to clients Monday.

Some viewed the reshuffling as a positive catalyst. Jeffrey Osborne, an analyst at Cowen & Co. who has an “outperform” rating on Nikola, wrote in a research note that Milton’s resignation is an effort to minimize distractions rather than as an admission of any wrongdoing on the part of the company.

“We would view this weakness as a buying opportunity, but acknowledge it may take a few days for the dust to settle,” he wrote.