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From

0:22

The Wall Street Journal, this is Bad Bets.

0:25

I'm Ben Foldy. We opened

0:27

this series talking about Trevor Mountain's Federal

0:29

Fraud Trial. That trial has

0:31

now reached a verdict. Trevor Milton

0:33

has found guilty Trevor Milton has been found guilty

0:36

of making false and misleading statements regarding

0:38

Nicholas Business. His sentencing

0:40

is scheduled for January.

0:41

Milton now facing a sentence of more than twenty

0:44

years in prison.

0:45

I was in the courtroom when the

0:47

verdict was read. Trevor seemed shocked

0:49

and stayed with his family for a long time

0:51

after the jury filed out. Outside

0:54

the courthouse, he told reporters, quote, I did

0:56

nothing wrong. End quote, He

0:58

had his layers of pledge to keep fighting. In

1:01

a statement, Nicholas said the company was pleased

1:03

to close this chapter and focus on executing

1:05

its business strategy.

1:06

We'll

1:11

get

1:11

back to the trial in a later episode. But

1:13

this episode is all about how Trevor got here.

1:15

to add everything that

1:17

had to change in the world, to put him in a position,

1:19

to both raise so much money and eventually get

1:21

in so much trouble how he raised it.

1:24

A lot of things had to happen. One

1:27

of the first factors started shifting in twenty eleven,

1:29

far away from Utah. President

1:32

Obama and his state of the union speech that

1:34

year made clean energy a national

1:36

priority. We're showing a challenge.

1:39

We're telling America's scientists and engineers that

1:42

if they assemble teams of the best minds

1:44

in their fields and focus on the

1:46

hardest problems and clean energy. We'll

1:49

fund the Apollo projects of our time.

1:51

He said it would be like this generation's moonshot.

1:54

and zero emission vehicles powered by batteries

1:56

and hydrogen would be a big part of it.

1:58

With more research and incentives, we

2:00

can break our dependence oil with biofuels

2:03

and become the first country to have a

2:05

million vehicles on the road

2:07

by twenty fifteen. The US government

2:09

had loaned billions of dollars to companies like

2:11

Ford and Nissan, and also a

2:13

Silicon Valley startup called Tesla,

2:15

owned by a branch, auditionist CEO,

2:18

Elon Musk. And soon,

2:20

Tesla's revolutionary model s would show

2:22

that there was a growing market for electric cars

2:24

and an opportunity for companies supply

2:26

that demand. But

2:29

cars represented only one part of the opportunity

2:31

for electric vehicles. There are more than two

2:33

million semi trucks on the road every day in the United

2:35

States. And proportionately, these

2:37

trucks pollute far more than cars do.

2:40

That is where Trevor Milton says he saw

2:42

his opportunity. Before

2:43

I go on, the reporting behind what you're about to

2:45

hear, we sent

2:46

to Trevor Milton's PR rep and lawyers

2:48

and asked for Trevor's side. They didn't answer

2:50

our questions. But Trevor did plenty

2:52

of talking publicly about his vision over the years.

2:55

Here he is describing the opportunity he saw

2:57

on a podcast called the Jimmy Rack show.

2:59

I realized that the trucking world was the dirtiest

3:01

world out there, and it was an industry that was incredibly

3:04

ugly. And I knew I had a chance that the money

3:06

is really in taking something that's ugly and taken it turned

3:08

it sexy. Trevor had been trying to break

3:10

into the trucking industry for years, like

3:12

his efforts with Dehybrid Inc. the natural

3:14

gas engine technology company. In

3:17

our first episode, we told you about Trevor's

3:19

idea for a locomotive semi, meaning

3:21

a truck with electric motors that could haul freight

3:23

while running cleaner than those powered by diesel.

3:25

And in the early twenty tens, it was almost

3:28

like Trevor's big idea had become a matter of

3:30

national import. And his electric

3:32

semi truck idea could meet investors growing

3:34

appetite for climate conscious investments. But

3:37

there still wasn't anyone who'd cracked the code on

3:39

taking semi trucks electric. It's

3:41

worth taking a second to explain why this is

3:43

such a big challenge. Why the lithium

3:45

ion batteries that power cars like Tesla can't

3:47

just be slapped on a semi? The

3:49

key thing to understand is that batteries

3:51

are very, very heavy. It's

3:53

not a huge issue for cars, which can be built

3:55

with lightweight materials to mitigate the weight

3:57

and sleek silhouettes that reduce air resistance.

4:00

allowing them to still travel a meaningful distance

4:02

for most drivers. But having enough energy

4:04

to haul sixty thousand pounds any meaningful

4:06

distance, that requires several tons

4:08

of batteries. and that cuts into the weight

4:10

you can haul and also means longer recharge

4:12

times. A trucker who is driving cross

4:14

country would have to make hours of stops every few

4:16

hundred miles just to recharge. Trevor

4:20

said a childhood revelation he had at a Union

4:22

Pacific rail yard sparked an idea for a solution.

4:24

This all started when I was a kid.

4:29

My dad inspired me with trains. He

4:31

was the manager of Union Pacific

4:33

Railroad in Las Vegas, I grew

4:35

up around trains. I grew up on the on the rail

4:37

yards. He said he was riding in the cab of

4:39

a locomotive when he had a conversation that

4:41

would shape his life. the conductor,

4:43

which is the guy who, you know, drives the train,

4:46

would say one day, it'll be smart enough to build a

4:48

locomotive semi truck. I

4:50

was six years old,

4:52

Around that age is when the light

4:54

bulb went off. The

4:55

idea was that you could have a truck

4:58

powered by electric motors and batteries. but

5:00

rather than needing to stop and recharge,

5:02

the batteries on the truck could be recharged

5:04

while it's in motion. They could do

5:06

this by running kind of a mini power

5:08

plant on board, almost like a

5:10

locomotive. In

5:12

the last episode, we told you about Trevor Mountain's

5:14

attempts at a new trucking technology and how

5:16

the sale of one of those companies for twelve million

5:19

dollars help seed his next enterprise. This

5:21

next company, he would go on to call

5:23

Nikola, taking the first name of the

5:25

electrical engineering pioneer, Nikola

5:27

Tesla, whose last name was

5:29

already taken. And it would be

5:31

this company, Nikola, that would attempt to

5:33

develop the electric semi truck that Trevor

5:35

had envisioned as Now

5:38

he just needed someone to build it.

5:40

Hi, mob Simpson. I'm an electrical

5:42

engineer from Farm and Oregon where I design

5:44

electric drive systems that

5:46

go into electric vehicles, whether

5:49

it's cars, trucks, motorcycles,

5:51

or really anything that moves under battery

5:53

power. Bob is an engineer. who spent a lot

5:55

of his free time rigging up electric cars at

5:57

a home workshop that he built. By

5:59

twenty

5:59

ten,

5:59

Bob had become a mainstay in the small world of

6:02

electric vehicle enthusiasts. after

6:04

taking a black BMW three series and

6:06

turning it into an electric car with a fifty mile

6:08

range. He'd go to EV meetups,

6:10

where the crowd wasn't all too different from the one Trevor

6:12

ran with back in Utah. a lot of budding

6:14

entrepreneurs who love toys. The

6:17

difference was that these toys, the electric

6:19

toys that Bob was interested in, It was

6:21

a sense among some of the people working on them,

6:23

but they might someday help save the world from the ravages

6:25

of climate change. And the auto industry was

6:27

beginning to take seriously the possibility

6:29

of an electric future. By

6:31

the early two thousand tens, electric vehicles

6:34

seem like they might become the next big thing. And

6:36

we're drawing in legacy carmakers, startups,

6:38

and garage tankers. In

6:40

his EV's inch closer to the mainstream, Bob

6:43

took his garage tinkering and he turned it into

6:45

a new business. called EV drive.

6:47

And as that business started to grow, he brought

6:49

on an apprentice, an up and coming

6:51

engineer named Paul Lackey. So

6:53

when I started working at EV drive,

6:56

it was really two guys in a

6:58

garage. We were located in

7:00

Bob's garage out in Banks, Oregon.

7:02

A lot of the people who had been hobbyist

7:04

were trying to start making businesses

7:07

out of it. So it's really

7:09

kind of a wild west community at

7:11

the time. After Bob's BMW, EV

7:13

Drive's next big project in the Wild West of electric

7:15

vehicles was an impressive little off road

7:17

number, an electric UTV. And

7:20

it was this UTV that they said brought

7:22

Trevor Milton into their lives. If

7:24

you don't know what a UTV is, imagine a

7:26

kind of off road golf cart with a roll cage.

7:28

He usually sees four people, and he's

7:31

used primarily for backcountry expeditions.

7:33

And the unique thing about this YouTube,

7:35

the thing that set it apart, Is that

7:37

EV drive had put a powerful electric motor

7:39

on each wheel? Here's Paul.

7:41

This machine had a lot more power,

7:44

so they're able to completely outrun

7:47

the gas powered version of it. And that's

7:49

something that people hadn't really seen at the

7:51

time. So this UTV, it was

7:53

really impressive. And it was also a

7:55

perfect encapsulation of one of the reasons why

7:57

electric vehicles looked like they might finally hit the mainstream.

7:59

It's not just that they're better for the

8:02

environment, that they can save you money on gas.

8:04

They can actually accelerate a lot faster

8:06

than conventional cars, which means that they

8:08

can be more fun to drive, Part

8:10

of why Tesla's caught up to use Trevor's

8:12

word from earlier. Electric vehicles were

8:14

starting to be sexy. Even if

8:16

it's, you know, a fairly powerful guess,

8:19

car. It always feels like it's

8:21

really

8:21

trying hard to move. You don't

8:23

get any of that with EVs. It's just you put

8:25

the pedal down and it's just

8:28

moving you so smoothly and quickly.

8:30

There's really no feeling like

8:32

it other than a roller coaster. Paul

8:34

and

8:34

Bob's funky little YouTube, it actually kind

8:36

of reminds me of a story we heard in episode

8:39

one about Trevor taking his spin on a go kart

8:41

that his friend rigged up with nitrous back in

8:43

Saint George. And in early

8:45

twenty fifteen, Bob got an email from

8:47

Trevor reaching out about a potential partnership,

8:49

a partnership to tackle a

8:51

really big idea. Bob says

8:53

Trevor wanted to take EV drives

8:55

technology and supersize it, put

8:57

it on a semi truck. Right

8:59

off the bat, Bob says he was really impressed

9:01

by Trevor's big idea. He

9:03

just knew that, you know, he was

9:05

on to something big that was

9:07

going to change the industry. And

9:09

I thought, alright, this is it. This is the

9:12

breakthrough, the industry needs

9:14

with electric. and it

9:16

was a brilliant design. In

9:18

March of twenty fifteen, Bob and Paul met

9:20

Trevor in person for the first time.

9:23

Trevor flew out to Oregon to check out EV

9:25

drive. And when Bob and Paul picked

9:27

him up from the airport, they say Trevor jumped right

9:29

into pitching them on his ideas. Here's

9:31

Paul. He immediately started

9:33

talking and really didn't

9:35

stop talking, you know, mostly

9:37

talking about his dreams and

9:39

what we were gonna do with him and so

9:42

forth. And he started telling

9:44

us his backstory. You know, he told the

9:46

story about when he was a little

9:48

kid and the train driver told him that

9:50

someday someone would make, you

9:52

know, a semi truck that worked like a

9:54

train and how that had been his dream and his

9:56

whole life and so forth. According to Bob

9:58

and Paul, the way Trevor told it, they were going to play

9:59

a starring role in a transportation revolution.

10:02

So for EV drive, I mean, this was

10:04

really kind of a big a potential for

10:06

a big kinda breakthrough. Absolutely,

10:08

you know. Trevor's

10:10

big thing was he would always say, you know,

10:12

I'm working with the best people people in the world.

10:15

And this project's gonna be done

10:17

by the best people in the world. And

10:20

maybe I'm gonna bring you on

10:22

and So obviously, the unspoken statement

10:24

there is you guys are the best in

10:26

the world, which we weren't, but,

10:28

you know, it's it's a nice thing

10:30

to feel. Bob and

10:31

Paul, say Trevor was offering them the chance

10:34

to join what he said was an elite team

10:36

tackling a really big idea. And

10:38

if it worked, they could build the

10:40

truck that Trevor envisioned, the engineers

10:42

from Oregon say they were told that they might

10:44

see a big payday. You know, he

10:45

mentioned that after we worked

10:48

with them, they would buy us out.

10:50

And so he

10:50

was really planting dreams in our head

10:52

for sure. Paul says you remember

10:54

something else from eating tremor for the first

10:56

time. Something that he says shocked

10:58

him. Trevor said Nikola

11:00

plan to build a hybrid electric truck with a

11:02

natural gas turbine. It wouldn't be

11:04

zero emission, but it would be a lot cleaner than

11:06

diesel. And at some

11:08

point, on Trevor's visit to Oregon,

11:10

Paul remembers when his partner Bob

11:12

asked, What if we took it one step further? What

11:14

if we tried to make a fully electric zero

11:16

emission truck rather than a hybrid?

11:18

You know, he was just kinda doing thought

11:20

experiments of what if we tried to do

11:22

this just with a battery? So it didn't

11:24

have the emissions from the from the

11:26

range extender. And Trevor,

11:28

he said, I don't give a shit about the

11:30

environment. I just wanna make money.

11:33

And, you know, that quote has stuck with me

11:35

ever since just because it was so

11:37

audacious and so vulgar and

11:39

so unexpected. Years

11:42

later, when he would be called to testify as a

11:44

witness in Trevor's Federal Fraud trial,

11:46

Paul recalled this anecdote for the jury. In

11:49

court, Trevor's lawyer has questioned whether this kind of

11:51

conversation would have shocked Paul.

11:53

pointing to examples where Paul himself used explicit

11:55

language online. But Paul

11:58

testified he wasn't just taken aback by the language, but

11:59

by the sentiment. Paul told us that he

12:02

became an engineer in part to fight climate

12:04

change. And Paul says it

12:06

for a moment, it felt strange teaming

12:08

up with someone whose motivations seemingly were

12:10

so different. But

12:12

Trevor's idea still represented a really

12:14

big opportunity to move the needle on cleaner

12:16

transportation. So the

12:18

engineers from Oregon decided to team up with

12:20

him, to help him build this unique

12:22

truck. Right away though, Paul

12:24

says that working with Trevor, it was

12:26

proving difficult. Yeah. As we

12:28

started working on this,

12:29

Trevor got a little

12:31

bit more scary. I would say, he

12:33

would get very hostile if we were,

12:36

you know,

12:36

missing a deadline

12:38

or something. And so we

12:40

were kind of a little bit intimidated

12:43

of him as as time went on.

12:45

But

12:45

for the most part, the engineers from Oregon say

12:47

they were able to look past this kind of thing.

12:49

The work was its own reward. To

12:52

them, The truck driver envisioned had a

12:54

real shot at being a very, very

12:56

impressive piece of engineering, and a

12:58

proof of concept that could kick start the electrification

13:00

of heavy transportation. Bob

13:03

and Paul said they were shipping the

13:05

components they made in their Oregon shop to Nikola

13:07

in Salt Lake City through the end of twenty

13:09

fifteen. But they say

13:11

when they visited Nikola's HQ in Salt Lake

13:13

City in early twenty sixteen, the truck

13:15

wasn't anywhere near done. At

13:18

that point, Paul says, What they

13:20

saw was mostly a bunch of unassembled

13:22

parts scattered around the warehouse. The

13:23

stuff that we had shipped them was kinda

13:26

sitting in the corner of this

13:28

empty warehouse on the same pallets we

13:30

had shipped them on. So it was

13:32

pretty obvious that there was

13:34

no truck imminent. In

13:37

May

13:37

of twenty sixteen, Nikola decided

13:39

it was time to come out of stealth mode. That's

13:41

what startup founders call it when they keep their

13:43

company secret. Nikola put out a

13:45

flurry of press releases to tell the world

13:47

what the company had in store. One,

13:51

simply announced that Nikola was going to transform

13:53

the transportation industry. Another

13:56

announced the hybrid electric truck, Bob, and Paul had

13:58

been working on. Chris and the Nicolet

14:00

one and said that the company was taking

14:02

reservations for him. The following

14:04

month, another release claimed that the Nicolet one

14:06

had already generated over two billion dollars

14:08

in preorder. and said

14:10

that the company would unveil its new truck at a

14:12

public event in December to six months

14:14

away. And then

14:16

in August, Nicola made its two most

14:18

ambitious announcements yet.

14:20

First, the company put out a press release

14:22

that said that Nicola won had achieved

14:24

zero emissions. which to

14:26

Bob and Paul just raised more questions. That

14:29

was really surprising and we spent some

14:31

time speculating on how he was

14:33

gonna make the serial emissions. And just a

14:35

few weeks later, in another press

14:37

release, Nikola provided the answer.

14:39

The Nikola one would be powered by

14:41

a hydrogen fuel cell.

14:46

The hydrogen fuel cell is a big deal in clean

14:48

energy circles. The technology is an

14:50

old one. It's been around since the

14:52

eighteen thirties. It uses a chemical

14:54

reaction to combine hydrogen, the most

14:56

abundant element in the universe. With

14:58

oxygen, the most abundant element on

15:00

earth, And in the process, it

15:02

creates electricity, heat, and

15:04

water. Remember,

15:06

Trevor's original idea was to build an electric

15:08

truck with a natural gas turbine. It would be

15:10

cleaner than a diesel, but it wouldn't be a

15:12

mission free. But if the truck

15:14

used a fuel cell instead, the only byproduct would

15:16

be water. I asked Paul,

15:19

Just to make clear, like, there's a big difference between a

15:21

hydrogen fuel cell and a

15:23

nat gas turbine, which is itself like a

15:25

pretty complex system. Yeah. So

15:27

those are completely different technologies.

15:29

Both of them are hard, but they're hard

15:31

in different ways. And, you know, the

15:33

idea that they would get

15:36

hydrogen

15:37

working

15:38

anytime soon was ridiculous.

15:40

It's like, how is he gonna do a hydrogen?

15:42

Like, where did he come up with that idea?

15:44

And I asked some of the

15:46

engineers, like, what's the plan for

15:48

hydrogen? And they

15:49

were like, we have no idea. we

15:52

have no hydrogen anything that

15:54

we're working on. And with

15:56

the trucks debut just three months out,

15:58

Bowl and Paul said that a sense of anticipation

16:00

and mystery

16:02

among some of the engineers they spoke with was

16:04

mounting ahead of the public unveiling. at

16:06

that point, we were all just kind of in the

16:08

dark, just kinda holding our breath.

16:10

Again, Bob, what was gonna happen?

16:12

Come December first, what

16:14

was he gonna say? because I knew

16:16

he had people scheduled up,

16:18

hundreds of people coming in and staying in

16:20

hotels, and it was gonna be a

16:22

big event. The engineers from Oregon

16:24

say they started working full time in Utah for

16:26

eight weeks leading up to the reveal.

16:28

And a few days before the big show, Bob

16:30

and Paul say that a sleek white

16:32

cab was put on the truck, but

16:34

they also say that the shiny new cab

16:37

was masking the fact that underneath, not only

16:39

were the trucks metal housings for gears and

16:41

motors totally empty, it

16:43

also didn't have a fuel cell in it or

16:45

anything else relating to hydrogen. They

16:47

said they watched as Nikola brought in an

16:49

artist who stenciled h

16:51

two for hydrogen on the truck.

16:53

even though there was no

16:56

hydrogen technology, not only

16:58

in this truck, but not under

17:00

development either. They

17:02

say the truck as it was, couldn't possibly

17:04

drive. In fact, Bob

17:06

and Paul told me the truck need to be plugged

17:08

into an extension cord for the headlights

17:10

to turn on. But from the

17:12

audience, it would look exactly like the truck

17:14

in the future Trevor said it was.

17:16

Paul says he was so ready to get

17:18

out of to get back to his family distance himself from

17:21

Trevor that he didn't even stick around for the

17:23

unveiling. Bob, on the

17:25

other hand, Bob says he was too

17:27

intrigued to leave, and that he'd

17:29

volunteered to be the guy who crawled onto the stage to plug

17:31

in the truck. I was very

17:33

very curious, and so I I

17:35

stayed on purpose for the event.

17:37

I mean, I didn't have to, but I wanted to

17:39

be there and and I wanted to, you

17:41

know, be on stage and and see

17:44

the whole thing splash out formally.

17:47

December first, twenty

17:50

sixteen. the day the Nikola

17:52

won would be shown to the world,

17:54

and the kick off of a two day presentation

17:56

about the truck. You can still watch

17:58

videos of the entire event This

18:01

event would be a hotly contested

18:03

part of Trevor's Fraud trial, and clips

18:05

from these videos would be presented as

18:07

evidence in that trial by

18:09

both sides. In the video of the main event, the

18:11

trucks unveiling on the first night.

18:13

You can see that the Nikola headquarters in Salt

18:15

Lake City looks

18:17

like it's hosting a Silicon Valley style

18:19

product reveal. A rotating

18:21

stage is flanked by massive

18:23

screens. There's elaborate stage driving. CEO

18:25

and founder, When Trevor Mountain's

18:27

introduced, the room goes completely dark

18:29

except for a set of spotlights that light his

18:31

path as he trots up onto the

18:33

stage. He's wearing a tight blue button down. leaves

18:35

your old up. He's got a big smile on

18:37

his face. Wow. Well, a good crowd out

18:39

here tonight. Thank you. I

18:41

appreciate it. This is a really

18:43

incredible time. one of my Trevor standing in front of the

18:45

Nikola one. It's on stage

18:47

covered by a giant white sheet. And he

18:49

tells the audience that the truck they're

18:51

about to see, it's going to change the world.

18:53

One

18:53

of the tasks in life that we have as

18:56

entrepreneurs is to be able to take risks that no one else

18:58

thought was possible, that

18:59

no one ever thought, well, they could that they could ever

19:01

do. The consequences would be too great, but we took

19:03

it and we achieved. It's a really incredible

19:05

story of our of

19:07

of our time. goes on to talk about

19:09

Nikola's innovative technology. The hydrogen

19:12

fuel cell that he says is in the

19:14

truck, how it's so much better

19:16

than diesel. The fuel cell

19:16

we have in the truck is seventy percent

19:19

efficient. So imagine a

19:20

diesel engine, you're much much

19:22

lower, a turbine, you're much much lower,

19:25

you're up to seventy percent efficient with a with a fuel

19:27

cell. He tries giving details about

19:29

the fuel cell. Our fuel cell is

19:31

APEM But Trevor seems to

19:33

forget on stage what the acronym stands for,

19:35

a proton exchange membrane, which

19:38

creates a strange moment where Trevor

19:40

just adlips. Our fuel cell is a

19:42

PEM. So Paul

19:43

Echo, Mango, whatever. I don't know the

19:46

terminology. I'll let you guys figure that out. PEM fuel

19:48

cell.

19:49

On board, There's

19:51

twenty

19:51

territox for over twenty minutes,

19:53

and then it's time for the big moment,

19:56

time to show the Nikola one to

19:58

the world.

19:59

Music

19:59

builds and is the strings

20:02

crescendo. The white

20:04

sheet covering the truck

20:05

is pulled off.

20:11

Oh, that thing is so awesome.

20:13

Oh,

20:14

we've been waiting so

20:16

long to show this the

20:18

world. You have no idea. It's a sad. It's hard

20:20

to even contain my

20:23

emotion about this.

20:25

Trucks sitting on the center of the stage,

20:27

the truck that's making Trevor emotional. It

20:29

looks like

20:30

it's from some sci fi movie about the

20:32

truckers of tomorrow. The

20:33

cabs gleaming white curves with dark angular

20:36

windows make it look like a stormtrooper's helmet

20:38

from star wars. On its

20:39

side, the words H20

20:42

emission hydrogen electric are written in

20:44

a clean bold font. Hydrogen's the

20:46

most it's it's really the

20:48

the only fill out there doesn't create any

20:50

or byproducts, incredible, only byproducts

20:53

water. So as this truck goes down the road, the only thing

20:55

coming out of this truck will be drips of water as

20:57

he's extolling the truck's benefits.

20:59

Trevor tells the audience he does have one worry.

21:01

We will have a chain on the

21:03

on the seats to prevent people

21:05

from coming into safety. don't want someone to end

21:07

up doing something and driving the truck off the

21:10

stage. So it's

21:11

a little expensive. Okay? You could probably buy

21:13

a jet with what it cost to build

21:15

this thing. So we're gonna try to keep people from

21:17

driving off, but this thing fully functions and works,

21:19

which is really incredible. Trevor

21:20

invites the then governor of Utah, Gary

21:23

Herbert, up on

21:23

stage to share in the moment. wanna

21:26

bring up the governor of Utah who is here

21:28

tonight. If you can come up, Gary appreciate it. And

21:30

on stage, standing next to the

21:32

governor. Trevor closes with

21:34

a promise. I wanted to thank for coming out to this

21:36

event. It means more to me

21:37

than anything. And this truck will

21:39

come to market. I can promise you that for

21:41

every doubter out there that said that there's

21:44

No way this is true. Absolute How

21:46

can that be possible we've done it? Bob

21:48

Simpson,

21:48

who was standing off to the side of the

21:50

stage, says he was looking on in disbelief.

21:53

He's telling everybody

21:54

something that this truck is not.

21:57

There was nothing hydrogen

21:58

about this truck. This

22:00

this is a

22:00

lie that you can't hide.

22:02

there's too many people that know about it. It's my pleasure

22:04

to actually let you guys enjoy the night, see

22:06

the truck, know it's real, touch it, feel how

22:09

sturdy it is, you're gonna see that this is a

22:11

real truck. This is not a pusher.

22:13

Thank you so much, everyone. I appreciate it.

22:15

Thank

22:16

you. Come

22:18

here, buddy. Watching

22:22

the replay of

22:22

the event online, I can almost feel

22:24

the enthusiasm in that room.

22:26

I radiates off the

22:29

screen. People are taking photos, several

22:31

get out of their chairs to applaud, a

22:33

standing ovation for a semi

22:35

truck. It seems like

22:37

a moment of triumph for Trevor. The defense

22:39

of his trial said that because the company was years

22:41

away from being publicly traded,

22:43

The events surrounding the reveal were irrelevant to

22:46

whether or not Trevor committed securities fraud.

22:48

But a jury decided that this was the

22:50

scene of a crime. And that Trevor's language

22:52

about the truck being drive a double constituted part

22:54

of his fraud. A

22:57

few days after the event, Bob was back in

22:59

Oregon with Paul. And Paul says

23:01

they were just waiting for Trevor to tell him to

23:03

get back work and what the next steps would be. What I

23:05

expected was an email the next day

23:07

saying, alright, everybody

23:09

back to Salt Lake City and let's get this

23:11

thing running before people figure out that that

23:13

doesn't work. That

23:15

email? They say it never

23:16

came. And they had their own business to

23:18

keep afloat. So the engineers from Oregon eventually

23:20

went back to work designing components for

23:22

other electric vehicle projects. They say they

23:25

tried their best to move on from Nikola.

23:27

For Trevor though, the success of the

23:29

Nikola one debut was something to build

23:31

on. It was a smash hit. On the Jamey Rec

23:33

Show podcast the following year, he said it

23:36

was Probably the most successful private

23:38

of a product in American history. He would

23:40

soon say that within just a few months of

23:42

the unveiling, Nikola was racking up billions

23:45

of dollars in preorders for the Nikola one. I got opportunity

23:47

to be able to build

23:49

a company that is turned into this

23:51

worldwide phenomenon. Within just a couple

23:53

months of launching our truck, and

23:56

a few months following thereafter, we've racked up

23:58

over six point five billion dollars

23:59

in preorders for our truck. An

24:02

internal

24:02

review by Nikola would later say

24:04

these orders were nonbinding. and that orders

24:06

for several hundred trucks were from companies

24:08

whose existence could not be confirmed. Nikola

24:11

was nonetheless asking for incentives

24:13

to build a factory to fulfill all those

24:16

preorders. I called

24:17

someone who says you heard Trevor's pitch first hand.

24:19

Can you can you hear us?

24:21

I can hear you. Yes. Okay. Great.

24:22

Former governor of Utah, Gary

24:25

Herbert, the same governor who Trevor called on

24:27

stage at the end of the Nikola one

24:29

reveal. Governor Herbert told me

24:30

that around the same time behind the scenes,

24:33

Trevor was trying to get Utah to give Nikola a

24:35

large incentive package to build its

24:37

factory there. we

24:38

started looking at the details. And one of the things that

24:40

we found out after that was, yeah,

24:42

we'd like to start building these here

24:45

and set up a manufacturing plant

24:48

And all we'd ask you to do is give us a hundred

24:50

million dollars upfront. The

24:51

former deputy head of Utah's economic

24:54

development office told us he recalls that Trevor

24:56

asked for two hundred million dollars

24:58

upfront. And he said Trevor asked for

25:00

other things as well. Look for the state

25:02

to order a thousand trucks, and buy a facility for

25:04

Nikola. The state said no.

25:05

I'm curious, did that kind of stand out?

25:07

Was that kind of an ambitious ask? Whoa.

25:10

Oh, sure. It

25:12

was ambitious, but it

25:14

was really unprecedented.

25:16

That's not how we do things

25:18

in Utah. We don't we haven't sent any programs. We

25:20

never do anything up front. Governor

25:22

Herbert said a state committee evaluated Nikola's

25:25

request and rejected it. And when

25:26

Governor Herbert talked to Trevor about it, he said

25:28

Trevor then made a harder sale. he

25:30

said, well, we're gonna go to Tennessee instead.

25:33

They're ready to take us on and

25:35

and help us where you are not willing to. And

25:37

I'd like to stay in Utah. I really want to

25:39

stay in Utah. and that's my home

25:42

state, but we're gonna have to go where

25:44

we can get the incentive. And

25:46

so, okay, well, good luck

25:48

to you. A

25:48

spokesperson for the Tennessee governor Bill

25:51

Hasland told us the state's economic development team

25:53

met with Nikola but did not pursue

25:55

the project. But in January

25:56

twenty eighteen, Nikola said it was

25:58

moving its operations

26:00

to Arizona, a state that offered the

26:02

company around five million dollars in grants

26:04

and around forty million dollars in tax incentives

26:07

provided Nikola met certain requirements.

26:09

At the

26:09

event who announced the move, Nikola showed

26:11

a video. In it,

26:13

the Nikola won. The same white truck that

26:14

Bob and Paul had worked on was

26:17

cruising on a desert highway pulling a

26:19

trailer. Panoramic drone

26:21

shots and the mountain backdrop give the clip a

26:23

real sense of speed. The company

26:25

also posted the footage on Twitter, where

26:27

Bob and Paulsock, and

26:30

they but they were completely bewildered. My first

26:32

thought was did they get that thing working?

26:34

Again, Paul. I hadn't

26:36

talked to anybody from there for

26:38

almost a year.

26:39

And so I texted my

26:43

friend and asked, hey, did you

26:45

get this truck up and running? He said, no, it

26:47

hasn't been touched since the show.

26:49

Meanwhile, Trevor's vision for Nikola

26:51

kept growing well beyond just

26:53

semi trucks. Trevor started talking a lot

26:55

about Nikola's plan to start making all the hydrogen to

26:57

fuel those trucks. as well. The biggest difference we've

26:59

been able to do is disrupt the whole supply

27:01

chain. So Nikola doesn't just build

27:03

the hydrogen electric truck

27:05

from the ground up, but we also build the

27:08

hydrogen stations that go with it.

27:10

It's the chicken and the egg. The

27:12

chicken

27:12

and the egg. This

27:14

idea was central to Trevor's vision for the company in the years

27:16

following the Nikola one reveal. Remember,

27:19

hydrogen fuel cells have been around since

27:21

the eighteen thirties, and fuel cells have been

27:23

put in cars experimentally at least since

27:26

the nineteen sixty. You could

27:28

buy hydrogen car right now. But

27:30

unless you live in California, you probably wouldn't have anywhere to

27:32

fill it up. And that's because no one's made clean

27:34

hydrogen fuel at affordable prices in

27:36

the US or built the network of stations that

27:38

would be necessary for interstate

27:41

travel. And Trevor said Nikola

27:43

planned to do just that. He wanted

27:45

Nikola to make both the trucks and

27:47

the fuel. It was as if the company's

27:49

business plan was to be the next Ford

27:51

Motor and the

27:53

next ExxonMobil. And

27:56

as Trevor cast his vision for Nikola's

27:58

future, other companies started wanting to

27:59

get in on it. Nikola

28:01

developed partnerships with some huge names

28:03

in global manufacturing. companies like Bosch.

28:05

We got Robert Bosch to put a hundred and

28:07

thirty million dollars into our company. And how did

28:09

I do that? I proved the fuel cell could work, and

28:11

I turned out and I said, hey, I've got I

28:14

will allow you guys to manufacture it for the whole world if you build it

28:16

for us and save me a billion dollars. And

28:18

they said, done. Let's do it.

28:20

We

28:21

reached out to Bosch, which told us it wouldn't comment

28:23

about Trevor Mountain. It did say it,

28:25

quote, invested in early funding rounds for Nikola

28:27

because it believes in the possibilities of

28:30

hydrogen technology. end quote. It

28:32

also told us that it's continuing to

28:34

develop fuel cell technologies and supporting

28:36

global customers, including Nikola. And

28:38

with partners like Bosch, Nikola was getting access

28:40

to the kind of engineering firepower and

28:43

cache that would help it develop prototypes of

28:45

new trucks, prototypes that could

28:46

actually drive.

28:49

I think this is one of the most crucial

28:50

parts of the story to understand.

28:52

I remember later when Nikola was getting called

28:54

out by skeptics for allegedly overhyping

28:57

its technology, People were asking if Nikola

28:59

was like Theranos. The company whose founder

29:01

was later convicted of misleading investors

29:03

over its blood testing technology. But

29:06

what happened here is far more interesting than that

29:08

because unlike Theranos, Nikola in

29:10

this moment didn't require some big

29:13

technological breakthrough. The technology already

29:15

existed even if it wasn't practical

29:17

yet. And though according to Bob

29:19

and Paul, while the Nikola one might not have been

29:21

everything Trevor claimed it was, there is actually

29:23

a world in which everything Trevor envisioned for

29:25

Nikola could become reality.

29:28

Through twenty nineteen, the company raised hundreds of millions

29:30

of dollars and continued making big deals

29:32

with big companies, gaining access to

29:34

technology and manufacturing partners.

29:37

By the end of twenty nineteen, Nikola still hadn't

29:39

made a truck for production yet, but Trevor

29:41

said the company was well on its way, that the

29:43

first trucks would be on the road soon. To

29:44

reach the kind of scale that Trevor

29:47

planned for Inicola though, plans that

29:49

involved building hundreds of hydrogen stations in

29:51

addition to thousands of trucks The company

29:53

would need a lot more money.

29:55

So in early twenty twenty, Nico

29:57

announced the company's biggest move yet.

29:59

the company was about to go

30:02

public. And it would do so during one of the

30:04

wildest stock market environments in

30:06

history. Many

30:06

of the top stocks on Robinhood have

30:09

seen triple digit returns in the past

30:11

month.

30:11

The blank check, bonanza, or

30:13

smack a palooza, what do you guys think Nicola

30:15

Motors, are they the next Tesla? That's

30:17

after the break.

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31:38

In March

31:39

of twenty twenty, while the US was starting to shut

31:42

down from the spread of a new coronavirus,

31:44

Trevor

31:44

and Nikola were staying active.

31:46

Nikola had

31:47

just announced that it would go public in the

31:49

next few months. Trevor was interviewed

31:51

on CNBC, live on the

31:52

floor of the New York Stock Exchange to talk

31:55

about Pretty happy to be sitting down now with the

31:57

founder and CEO of Nikola.

32:00

Nikola, I'm still trying to work on

32:02

it guys, but I'm gonna get it right. With the

32:04

pandemic looming The floor of the exchange behind

32:06

Trevor in the video is bereft of its usual

32:08

hustle and bustle. There are three people

32:10

behind the news desk. There's the

32:12

interviewer, David Faber, one of CNBC's

32:14

biggest There's Trevor

32:16

in his characteristic Nikola Polo

32:18

shirt, and a third man, a member

32:20

of Nikola's Board of Directors. a

32:22

swab looking guy and a suit and tie, longest gray hair pushed

32:24

behind his ears. Trevor Milton, and

32:27

Jeff up, and of course a man you've seen occasionally

32:29

on CNBC, though, not in some

32:31

time. chairman of Value Act. Jeff Obin

32:33

is a notable name in the finance world.

32:35

He's famous for being an activist investor,

32:37

which means he and his firm Value Act would

32:39

buy large stakes companies and push

32:41

to implement his ideas on how they should be

32:44

run. And ValueAct had just

32:46

made a sizable investment in Nikola with

32:48

Jeff taking a seat on Nikola's board.

32:51

We reached out to Jeff Obin for comment and we didn't

32:53

get a response. Activist

32:55

investors like Jeff can sometimes be at odds

32:57

with company's executives. But

33:00

at Nikola, Jeff says he was aligned with Trevor's vision.

33:02

In that CNBC interview, Jeff says he used

33:04

his influence on Nikola's board to help convince

33:06

Trevor that now was the right time to go

33:09

public. He says that with enough

33:11

capital, Nikola has the chance to grow into one of the

33:13

most valuable companies in the world. I

33:15

mean, this is this is a

33:17

hundred billion dollar company.

33:19

A hundred billion dollars company

33:21

because it's solving the biggest problem,

33:23

which is decarbonized in transport fuel.

33:26

In its deal to go public, Nikola said its value was a

33:28

little over three billion dollars at this point.

33:30

And Jeff Albin was making the

33:32

case on national television that

33:34

it might grow into a hundred billion dollar company. And

33:36

he's betting that going public now is the

33:38

route that just might get it there. but

33:41

the way Trevor and decided to go public might have been a key

33:43

reason for his conviction. The

33:45

normal process to go public, listing your company

33:47

through an IPO, it's a

33:50

cumbersome one. It can take years to prepare

33:52

with lots of legal review and back and forth with

33:54

the SEC. Trevor Mountain and

33:56

Jeff Robbins say that they chose a quicker

33:58

way because there was a hot new

33:59

trending capital hit. SPACS.

34:02

SPACS have burst into the mainstream

34:05

this year.

34:05

Everybody needs to have a spat. SPACS.

34:07

SPACS. SPACS. SPACS. As you might

34:10

guess, SPAC is an

34:12

abbreviation. It stands for a special purpose

34:14

acquisition company. It's kind of a go public

34:16

quick alternative to an IPO. A SPAC

34:18

is essentially a publicly traded shell company

34:20

with a pile of cash. It's listed on a

34:22

stock exchange but doesn't have an actual

34:24

operating business. For this reason, often

34:26

called blank check companies. Here's how

34:28

they work. Spacks go public and raise

34:30

money from investors by promising to buy

34:32

a private company with that cash. Private

34:35

company gets new funding and a public listing

34:37

with less scrutiny than a traditional

34:40

IPO. Investors

34:40

in this fact hope the combined

34:42

company is a big hit. But

34:44

here's the key difference. A SPAC deal is a merger, not

34:47

an IPO, which means the private

34:49

company doesn't have to go through the entire slog of

34:51

the traditional IPO process.

34:54

And this is part of Trevor's pitch in the interview on

34:56

CNBC. We needed a method to get to

34:58

the market, to get publicly traded quickly, and that's

35:00

really what the SPAC was there for. It

35:04

It helped us get to market in less than six months, saved us a bunch

35:06

of time. In other words, one

35:08

of the main reasons Trevor

35:09

says Nikola is choosing to go public through

35:11

his back, is speed. and

35:13

the kind of money that public markets provide could help fund

35:16

Trevor's vision for Nikola's future. So what

35:18

was the key advance here that you feel you've made?

35:20

I would assume it has to do with the fuel

35:22

cells themselves? No. It's actually the

35:24

chicken and the egg. It's very similar to Amazon.

35:26

The reason why Amazon's been so successful

35:28

around the world is that they cover

35:30

not just the goods sold online. I mean,

35:32

anyone can do that. but it's the entire

35:34

logistics behind it, the vertical

35:36

integration. Very similar to what Nikola has

35:38

done. What we've done is we don't just sell a truck.

35:40

We're really a tech energy company. It's what

35:42

we are. We actually sell all the energy for the truck to the

35:44

consumer at the same time. Got

35:46

that. Again,

35:47

Trevor's saying Nikola isn't

35:49

just a truck company. It's

35:52

an energy technology company, building an entire ecosystem

35:54

around the future of transportation. That's

35:56

the vision Trevor is pitching

36:00

to investors. And Trevor says that the money the company is planning to raise

36:02

will help Nikola grow into a

36:04

manufacturing juggernaut. The crazy thing is we'll

36:06

be the largest energy consumer in the

36:08

world in

36:10

seven years. the largest energy consumer in the world

36:12

in seven years. It's a

36:14

remarkable claim. And forecasts

36:16

like that

36:16

like that You don't

36:17

typically hear them in a traditional IPO

36:20

process because there are actually other differences

36:22

beyond just speed that separates back

36:24

from IPOs. I called

36:25

a professor at the University of Washington

36:27

who spent a lot of time studying this back boom

36:29

to help explain. I'm Beth

36:31

Blanca Spohr, and my main

36:34

research agenda is anything dealing with

36:36

how companies communicate

36:36

with their investors. Beth says

36:38

that in a traditional IPO, companies go

36:40

dark for weeks before their shares

36:42

begin trading. no executive interviews, no big press

36:45

releases. It's called a quiet period. But

36:47

Beth says that a lot of companies that

36:49

went public through specs in twenty twenty, they

36:51

did things a little differently. There

36:53

are

36:53

a lot of rules around IPOs because

36:55

it's a new company coming out to the market

36:57

and no one really knows about

36:59

it. With stocks, the word on the street was, yeah,

37:01

you can say, you know, more things. There is

37:04

less risk that you'll get

37:06

in trouble. because it's

37:08

technically not an IPO. It's more like a

37:10

merger and, you know, we say things in mergers.

37:12

It's fine. The SPAC

37:13

IPO distinction is kind of a

37:15

legal gray area. But in twenty twenty, around the time Nikola

37:17

went this back route, some folks on Wall Street were arguing

37:20

that spec deals offered certain protections that

37:22

IPOs didn't.

37:24

protections around things like forecasting future results.

37:26

You have these firms

37:27

making really optimistic claims, and some

37:29

of them, like

37:32

Nikola, they're talking during the whole process

37:34

where most IPOs, they're not

37:36

allowed to say things. And

37:38

that,

37:39

Beth says, led to

37:41

a situation in the summer of twenty twenty where some executives striking SPAC deals were making

37:43

big claims about their company's futures, right as

37:45

the public was hearing about them for

37:47

the first time. And this

37:49

stuff she says, it just doesn't

37:51

happen with IPOs. You have

37:53

this playground where they're told

37:55

they can say all sorts of

37:57

future projections and are safe from lawsuits. And then they start

38:00

looking around and they see that all these

38:02

other facts saying be

38:04

fantastic. And now suddenly you have this competition

38:06

where everyone's trying to say, I'm going

38:08

to be the best. You should invest

38:11

in me. And my reporting shows

38:12

that Trevor had a history of giving investors

38:14

rosy projections about the future. When

38:16

I watched that interview with Trevor Milton

38:18

and Jeff Alvin on CNBC, I'm

38:21

reminded of some of Trevor's early investors back

38:23

in Saint George who said Trevor told them

38:25

that they'd double their money. And I'm

38:27

reminded of dehybrid's projections. which said the

38:29

company would go from no revenue to hundreds of millions

38:32

in profits in just a few

38:34

years. And by twenty

38:34

twenty, it was Nikola telling investors

38:37

to expect pretty amazing growth. If

38:39

the company achieved

38:39

what it was forecasting, it would be the fastest company ever to

38:41

go from no annual revenue to ten billion

38:43

dollars in annual

38:46

new. Beat in current record holder, Google. And

38:48

Beth thinks there's another reason why companies

38:50

who do SPAC mergers might choose to

38:53

make these kinds of projections. Retail

38:55

investors. Meaning individual investors who use

38:57

brokerage accounts like Fidelity or Robinhood,

39:00

trading on their phones

39:02

and laptops, looking for

39:04

the next Google. A

39:05

lot of retail investing is, you

39:07

know, looking for that one outlier. And

39:09

then all the company they haven't sent

39:11

us to say, I'm gonna be that one great company you should invest in me. And by

39:13

the summer of twenty twenty, individual

39:14

investors had become a

39:17

market moving force.

39:19

I talked to my colleague, Gunjan Banerjee, a lead

39:21

writer for our markets coverage at The Journal,

39:23

to talk about how that happened and

39:25

what it meant. Gungjin has done a

39:27

lot of reporting on the retail trading boom over the past couple of years, and

39:29

she told me that the reason behind

39:31

it was actually pretty simple. It

39:33

was really easy to make money in the stock market in the

39:36

spring of twenty twenty. You had

39:37

the COVID-nineteen

39:38

pandemic, and

39:40

all of a sudden, the economy was shut

39:42

down. We were all sitting

39:44

at home on our computers or on

39:46

our phone spending so much time staring

39:48

at these screens. There was no

39:50

sports. There was no sports betting.

39:52

So this kind of became national entertainment to

39:55

trade stocks. And it was

39:57

so fun at the time because

39:59

everything was going up And

40:01

it seems like everyone around you is

40:04

finding success in the stock market. So

40:06

why not try to double or triple

40:08

or quadruple your money?

40:09

and it just seems so easy to get stupid

40:12

rich.

40:12

Couldn't you tell me there were a lot of stocks you could have

40:14

invested in around March of twenty twenty that would

40:16

have given you solid returns as the market bounce

40:18

back. And she

40:19

echoed with Beth, the accounting professor said,

40:22

that many of these retail traders

40:24

weren't just looking for solid returns. They

40:26

were looking for

40:28

massive returns. A

40:28

lot of investors were looking for hyper growth stocks. They

40:30

were looking for companies that promised insane

40:32

amounts of growth in the future.

40:36

what is the next Tesla? What's the next Amazon?

40:38

Do you

40:38

remember the first time you heard the name

40:40

Nikola? Or,

40:41

like, in what context? the

40:43

first time I heard the word

40:46

Nikola was probably when I

40:47

was talking

40:48

to individual investors in

40:52

twenty twenty. one stock a

40:54

lot of people were focused on was

40:56

Tesla. But a lot of individual

40:58

investors, they had missed out

41:00

on Tesla. So I think the first time I heard about

41:02

Nikola was, you know, someone saying to me this

41:04

is gonna be the next Tesla. And

41:06

in that interview on

41:07

CNBC in March? Trevor

41:09

underlined the parallels he saw between the two

41:12

companies. Tesla, by the way, has has done an

41:14

incredible job. They've they've gathered the

41:16

whole world to follow behind him, and that's kind of what

41:18

Nikola has done around the trucking role. We have the

41:20

same type of following of people that

41:22

just love love us. It's a re it really is a

41:24

retail play. We reached out to Tesla

41:26

for comment, and we didn't get

41:28

a response. In the run up to trading some

41:30

YouTube stock influencers were already asking

41:32

whether Nikola really might be the

41:34

next Tesla. and Trevor

41:36

Milton, the Elon Musk of the eighteen

41:38

wheeler. Tesla is the future,

41:40

but wait, have we found the

41:42

next Tesla? is investing

41:44

in the Nikola Motors IPO in

41:46

twenty twenty similar to

41:48

investing in the Tesla IPO in twenty

41:50

ten. And on June fourth, twenty twenty,

41:52

Nikola

41:52

went public. Trevor thanked his

41:54

supporters on a live broadcast. This

41:56

is where

41:57

our opportunity today is to

41:59

celebrate with all of you and of our

41:59

employees, all of our fans and our

42:02

believers, everyone who wants to

42:04

actually change the world. As a

42:06

part of

42:08

this announcement, Trevor's face was actually projected on a screen in Times

42:10

Square to count down to the closing bell. I

42:12

wanna thank all the governments and all

42:14

the investors

42:16

that have made this possible. It's now my

42:18

opportunity

42:18

and my pleasure

42:20

to count down to the ringing of the

42:22

bell for the Nasdaq with the nuclear motor

42:24

company. After

42:27

Nicolas shares

42:30

started trading,

42:32

Trevor took

42:34

to Twitter to tell of Nikola's coming success.

42:37

And some of these tweets would also

42:39

be a hotly contested issue at Trevor's

42:41

trial. One of the things he about

42:43

in the days following Nikola's debut on the

42:45

stock market was a zero mission pickup truck

42:47

that Nikola said it was working on called

42:49

the Badger. A truck Trevor said was designed

42:51

to dethrone the top selling vehicle in America,

42:54

the Ford f one fifty. So

42:56

a Nikola investor in those early days was buying

42:58

shares in a company that its founder said would make

43:00

semi trial hydrogen fueling stations

43:02

and pickups, the most popular style

43:04

of vehicle in the US. The excitement

43:07

around the company reached a fever

43:09

pitch. A nicholas stock live

43:11

tire after Trevor tweeted on June seventh

43:13

that reservations for the Badger would be going

43:15

live soon. Nikola

43:18

Motors is on absolute fire today.

43:20

If you guys aren't

43:23

entertained yet, well, make sure you stay

43:25

tuned because we're talking more

43:27

about this in insane supernova move today

43:30

here on MTLA.

43:32

By June ninth, Nikola had evaluation

43:34

around thirty billion dollars.

43:37

It shares been trading for four days. At the trial,

43:39

the defense's only witness was Alan

43:41

Farrell, who teaches securities law at Harvard

43:43

Law School. Farrell testified that changes

43:45

in needless stock price

43:47

could explained by factors including market forces, company

43:49

announcements, and random volatility, but

43:51

not retail investors relying on

43:54

tweets. Two retail investors

43:55

testified at the trial that

43:57

they did rely on tremor statements. It is

43:59

the

43:59

new hot electric vehicle stock.

44:02

Nikola roaring higher. It is now up

44:04

ninety six percent since its June

44:06

fourth debut of one point last week and had

44:08

a market cap bigger than that a

44:10

Ford

44:10

Motor. Again, Trevor talked to Twitter.

44:12

Quote, I've wanted to say this

44:14

my whole adult life. Nikola is worth

44:16

more than Ford and FCA

44:18

nipping on the heels of GM. It

44:20

may go up and down and that's like

44:23

but I'll do my part to be the

44:25

most accessible and direct executive on

44:27

Twitter.

44:27

Others will

44:30

follow. This is

44:31

when Nikola really caught my eye as

44:33

a reporter. I was on the auto's desk at the

44:35

time. And when an electric vehicle start ups

44:38

market cap balloons pass forwards within a week of going public. It's the

44:40

kind of thing that grabs your

44:42

attention. I was assigned to write my first story about

44:43

Nikola that

44:46

day. One

44:46

of the things I found most striking as I started

44:49

reporting was the company's flamboyant, very online founder, and how

44:51

he used social media, The

44:54

investors around the world right now are tired. They're tired of,

44:56

like, an executive sitting in an office

44:58

behind his chair making millions of dollars and,

45:00

you know, forgetting about

45:02

the average factory worker or even the

45:04

consumer. So there's unparalleled contact

45:06

between myself, the one the

45:08

the executive chairman, and the of Nichola and

45:11

all of our fans over

45:12

the summer

45:13

of twenty twenty. On podcasts, on

45:15

television, on social media, I

45:17

watched Trevor

45:18

tell Grindr and Grindr stories about himself

45:20

and the company that he founded. I spent

45:22

my life trying to build that

45:25

locomotive semi truck. And I did. I was the first person in the

45:27

world to build a locomotive semi truck. I watched him tell the story

45:29

of a

45:29

serial entrepreneur. One whose

45:32

ideas were sometimes ahead of

45:34

their time. We

45:35

met with every truck company in the world, and most of them were so arrogant that I could never work

45:37

with them. They were just complete a holes. And, you

45:39

know, I would walk in the room and say, why should we

45:41

work with you? And I would just

45:43

walk right out the door. I'm like, if you

45:45

can't see why your old dinosaur ass

45:48

needs to work with me, I have no

45:50

desire to even be in

45:52

this room. But now

45:53

he said his idea had

45:55

finally arrived. Success was

45:58

inevitable. I'm gonna build this company become the

45:59

most valuable trucking company in

46:02

the world. of the most valuable brands in the world. One of the top, you

46:04

know, maybe five or ten greatest growth stories in

46:06

American history because I know what's

46:08

coming. And while Trevor was talking up

46:09

Nikola's potential,

46:12

the company's early success had made him very, very rich.

46:14

He set a Utah real estate

46:16

record with the purchase of a thirty two million

46:18

dollars range. It's got eight bedrooms.

46:21

a helicopter pad, and a wine seller,

46:23

which Trevor did a walk through of for his followers

46:25

on Instagram. So this is a little wine seller thing

46:28

we have

46:30

and my My wife drinks wine. I don't. So all the wine you see is

46:32

hers, but you can see instead of bottles of wine,

46:34

there's like Trevor also bought a

46:36

Gulfstream private

46:38

jet. from a fund led by the Nikola board member we mentioned earlier,

46:40

Jeff Obin. He paid for it with

46:42

six million dollars worth of Nikola stock.

46:45

He bought two other planes as well and

46:47

would post videos about them on social media. I'll

46:49

try to do a couple little videos of

46:51

me flying up there. lot different than the other plane

46:53

I usually film with because this guy is a little guy. I looked in Nikola's filings

46:55

and saw that Trevor sold around ninety four million

46:57

dollars worth of stock around the time of

46:59

this back deal. And

47:01

at the Stock's peak in June, Trevor's remaining

47:04

shares in Nikola were worth more than eight

47:06

billion dollars. It

47:08

seemed like everything was going swimming late for Trevor

47:10

Melt From the outside,

47:12

he seemed unstoppable, but

47:15

that would soon

47:18

change. On the next

47:20

episode

47:20

of Bad Bets.

47:22

We take you inside the group of people

47:24

who would band together to bet against Trevor

47:26

Milton. I called him up and

47:28

he answered and I said, look, I'm a lawyer

47:30

in Salt Lake City. I'm

47:34

just investigating This guy Trevor Milton, and I said, man, I've been

47:36

waiting for this call for about ten years.

47:38

And a team of professional skeptics

47:40

puts Trevor under

47:42

a microscope We just went through all the video footage that we could

47:44

find, all of his interviews,

47:46

and just systematically went through the

47:48

claims to try and

47:50

test them to see if

47:52

they're real. And that became kind of the foundation of

47:54

the short report, a list of

47:56

lies. That episode is

47:59

out next week on October twenty eighth. Bad bets is

48:02

a production of The Wall Street Journal. This

48:04

season is produced with jigsaw productions in

48:06

collaboration with

48:08

Storyforce Entertainment. This

48:09

episode is hosted by me,

48:11

Ben Foldy. The series is directed by

48:13

Sruthi Pinemon eighty. Scott Callaway is

48:15

the supervising producer. Ken Brown

48:18

is WSJ's financial enterprise

48:20

editor. Shane McKinnon, Frank Matt,

48:22

and Garrett Graham are

48:24

the editorial consulting by PJ Boat, fact

48:26

checking by Elizabeth Moss, sound design,

48:28

original composition, and mixing by

48:30

Armin Bazarian.

48:32

the Wall Street Journal, Daniel Rosen is the co executive producer

48:34

of WSA Studios. Ben Waltman is

48:36

the senior executive producer. For jigsaw

48:38

productions, Stacey Hoffman and Richard

48:42

Perrello are executive producers. For Storyforce Entertainment, Bli

48:44

Pagan Faust and Cory Sheppard Stern are

48:46

executive producers. Special thanks

48:48

as well to WSJ's Charles Ferrell

48:51

Jamie Heller, Brent Kendall, Christina Rogers, Good

48:53

Jim Energy, Jonathan Sanders, Corey

48:56

Ramey, James finale, Rick Brooks,

48:58

Emma Moody, and

49:00

Jessica Fenton. If you're enjoying the series, please take a moment to subscribe and

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platform. And thanks for listening. See you

49:06

next week.

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