Tag: news

Nikola stock plunged more than 25% after founder Trevor Milton unexpectedly resigned as Executive Chairman of Nikola just days after the company was reported to be the focus of investigations by the SEC and DOJ following a highly critical short-seller report. The resignation was first reported by FreightWaves.

“Nikola is truly in my blood and always will be, and the focus should be on the company and its world-changing mission, not me,” Milton wrote at 2:21am in a terse, disjointed tweet to which he blocked responses (one can imagine why), confirming the FreightWaves rerport. “So I made the difficult decision to approach the board and step aside.”

I will be cheering from the sidelines with you. Your greatest fan. pic.twitter.com/IaYfZedYhK

— Trevor Milton (@nikolatrevor) September 21, 2020

Well, Trevor, it was never about you as the NKLA price confirms, but we are confident the regulators will be happy to make it about you now that you have confirmed that the Hindenburg report was accurate and most if not all of Nikola is a fraud. Until then, just keep an eye on Trevor taking a private jet to various non-extradition countries.

Milton’s tweet was merely the latest indication that Milton, like Tesla’s Elon Musk, has relied on social media to promote his company. In February, he introduced the Badger truck via a tweet, calling it “the most advanced electric & hydrogen pickup, designed to take down the Ford Raptor.” On June 8 he tweeted that Nikola would start taking Badger reservations later in the month for “the most bad a – zero emission truck.” Potential buyers paid deposits as high as $5,000 – without even seeing a prototype of a vehicle that won’t go on sale until 2022.

As Bloomberg notes, “investors have sometimes struggled to keep up with Milton’s messages, especially given the evolving list of projects Nikola is pursuing: battery-electric big rigs in Europe, fuel-cell-powered semis in the U.S., an electric pickup to be built by GM, becoming the preeminent supplier of hydrogen for fleets of vehicles and vague proposals to enter the market for high-performance sports cars.”

“It’s a bit confusing trying to follow Trevor on his various social-media outlets about the timing and cadence of communication of the different variables that you’re talking about,” Jeff Osborne, a Cowen & Co. analyst, told executives during Nikola’s first earnings call on Aug. 4.

Milton’s resignation comes less than 2 weeks after Hindenburg Research’s original report calling the company an “intricate fraud” and just 6 days after Hindenburg’s follow up report stating it viewed Nikola’s response as a “tacit admission of securities fraud”. 

It remains to be seen whether the sudden departure has anything to do with reports of both the Securities and Exchange Commission and the Department of Justice making inquiries to the company. Additionally, Tweets began to surface late Sunday night by the CEO of Entrata, David Bateman, who alleged that women had “come forward accusing Milton of groping her”.

Trevor hired her for a https://t.co/E5n9ccpnHW modeling shoot. Of course the shoot was out of town, and he arranged the trip so he’d be sleeping in the same home as the two models he hired. After pushing him off he berated her and slept on the floor next to her bed all night

— David Bateman (@davidbateman) September 21, 2020

The sudden resignation also came just hours after Cowen put out a note defending the company and Milton, placing a $79 price target on the company. “To be clear, we don’t believe Nikola is a fraud,” Cowen said.

Cowen put this out literally hours ago $NKLA

“We see Mr. Milton as overly aggressive in the positioning, specifics and timing of many of the variables he has discussed, but we don’t see this as intentional deception” pic.twitter.com/tQ9FT7zZcf

— Quoth the Raven (@QTRResearch) September 21, 2020

Oops.

As reported previously, Nikola had said it voluntarily reached out to the SEC to discuss its issues with the Hindenburg report, and ultimately held a call with agency officials on the morning of Sept. 11. Nikola says Hindenburg was attempting to profit from a “manufactured decline” in its share price.

“Nikola has contacted and briefed the U.S. Securities and Exchange Commission regarding Nikola’s concerns pertaining to the Hindenburg report,” the company said early last week. “Nikola intends to fully cooperate with the SEC regarding its inquiry into these matters.”

In a lengthy report on Sept. 10 Hindenburg Research compared Nikola to Theranos, calling it an “intricate fraud” which overstated the capabilities of its earliest test trucks among many other allegations. Among the bolder accusations made by Hindenburg Research in their recent scathing report about Nikola Corporation was the allegation that Nikola faked its Nikola One semi truck “in motion” video, which appeared to show a functioning big rig barreling through the desert, trailer in tow.

Some people even took to the desert with their own cars to recreate the experiment on the same hill. 

On the morning of September 14, Nikola put out a response that confirmed its Nikola One wasn’t powering itself during the company’s 2018 commercial featuring the semi. You can read Nikola’s full response here. 

Nikola’s shares have roller-coastered since the company went public on June 4 in a reverse merger, with Girsky’s blank-check company VectoIQ. At one point, they soared so high driven by clueless Robinhood momentum-chasers that the startup’s market value exceeded Ford Motor. After the third day of trading, Milton – who owns 35% of the company, based on regulatory filings – was worth $9 billion, making him the world’s 188th richest person. His net worth was valued at $4 billion before Monday’s stock plunge.

The question now is whether GM CEO Mary Barra, who infamously defended her investment in Nikola claiming sufficient due diligence was performed, follows in Milton’s footsteps and resigns next.

At this point, few serious market historians would deny that Robinhood has changed the market game in a major way. As we explained a few weeks ago when it was revealed that the SEC would be investigating Robinhood for allegedly misleading customers about how it makes money, the discount brokerage is now making a tidy sum selling its users’ order flow to HFT firms like Citadel.

Some might call this “market making”, others might call it “frontrunning”. It depends on the context. As far as RobinHood’s business goes, the company, and its discount brokerage rivals, bristle at the notion that RH is helping HFT firms front-run mom-and-pop traders.

Whatever the impact on market conditions, it’s clear this trend has accelerated dramatically since the start of the year. It’s one reason Barstool Sports’ founder Dave Portnoy has achieved almost as much notoriety for his market commentary as he earned from his pizza reviews.

Thanks to the allure of “gameification”, young people actively trading via discount electronic brokerages has become so popular, that managers of large mutual funds are starting to feel threatened. 

Fidelity portfolio manager Will Danoff, the longtime manager of the $139 billion Contrafund, which is up more than 20% year to date, significantly outperforming the S&P 500 recently told Bloomberg that he’s “worried” about Robinhood luring away more of his investors, particularly younger investors.

Will Danoff has been wondering why billions of dollars keep flowing out of the Contrafund, the giant mutual fund he manages at Fidelity Investments. Performance isn’t the problem. He’s up 21% this year, trouncing the S&P 500’s 6.2% return. His conclusion: Today’s kids want something sexier.

“There’s a demographic issue,” Danoff, who has beaten the benchmark by an average of more than 3 percentage points annually over three decades, said in a Bloomberg Front Row interview. “We need to appeal to the Gen Z-ers and the younger generation as well, and luckily I think our app is quite good. But you know, a typical Gen Z-er may not be as interested in owning a mutual fund.”

To be sure, mutual funds have been on the decline for years, losing more and more market share to lower-cost ETFs. Now, the younger generation’s demands for user-friendly and trendy apps, and their taste for the rush of “day trading”, represents a new challenge for people like Danoff.

As Bloomberg points out, compared with Portnoy, Danoff’s buy-and-hold methodology looks “antiquated”.

Next to the social media antics of celebrity speculator Dave Portnoy, Danoff’s world of buy-and-hold discipline seems antique by comparison.

“When I started in 1990, there were 261 equity funds, and now there are thousands,” said Danoff, who manages $230 billion. “There are thousands of hedge funds. There are thousands or millions of Robinhood investors. There’s sovereign wealth funds, etc. So there’s no question that it’s become much, much more competitive.”

Danoff’s concerns are certainly justified, but he’s missed out on some important trends himself. Danoff told BBG he dumped his Tesla position back in 2018, missing out on $10 billion in gains.

Will Danoff

Buying back in to such a capital-intensive business at such a lofty valuation makes him too apprehensive to even contemplate, so he feels like he’s stuck in limbo, he says. At the same time, Danoff has stuck with Berkshire Hathaway shares, despite Berkshire’s struggles over the past decade.

But even Buffett, at the age of 89, is finding ways to innovate that are throwing Wall Street for a loop. This year he has dumped stocks, airlines and other US stocks in favor of buying stakes in Japanese trading houses, and Barrick Gold.

Fidelity also owns and operates its own discount electronic brokerage, and has sought to lure younger investors with offerings like crypto trading, and allowing customers to integrate Coinbase. So, should Danoff start working on his cover letter for a job at DDTG? Probably not. However, if the goal is to make mutual funds more “fun” or “exciting” in the hopes of attracting more young investors, the firm will have its work cut out for it:  any fund or asset that prices just once per day probably isn’t exciting enough to hold the attention of younger investors.

But how might this trend impact market dynamics? Well, some argue we’re already seeing it play out in real time. Just look at the Nasdaq Thursday: It has already swung 2% in both directions.

At the end of the day, Fidelity has reason to complain: It’s attempts at being ‘hip’ aside, the exchanges and HFT firms are the ones who are really going to make a killing off the “Robinhood-ification” of markets.

Authored by Patrick Buchanan via Buchanan.org,

Having presided over the recognition of Israel by the United Arab Emirates and Bahrain, President Donald Trump has been nominated for a Nobel Peace Prize amid talk of peace breaking out across the region.

Assuredly, this is a major diplomatic breakthrough, and Nancy’s Pelosi’s sour-grapes dismissal of the deal as a “distraction” testifies to that truth.

Recognition of Israel by the UAE and Bahrain will, it is predicted, be followed by recognition of Israel by Oman and other Gulf states, perhaps even Saudi Arabia. But the idea that peace is at hand appears to be, as Mark Twain said of reports of his death, premature.

Indeed, the Gulf Arabs could be signing up to recognize Israel because they see the Jewish state as an indispensable ally in the Arab Sunni clash with the larger and more powerful Shiite Iran.

In 1979, the Camp David Accords were signed in a land-for-peace deal whereby Israel returned the Sinai, captured in the 1967 Six-Day War, to Egypt. Egypt’s Anwar Sadat and Israel’s Menachem Begin both won the Nobel Prize for Peace. Yet, while peace was established between Cairo and Jerusalem, that did not inaugurate an era of peace.

Jordan’s King Hussein recognized Israel in 1994. Yet, since then, Israel has fought wars with Hamas in Gaza, Hezbollah in Lebanon and the Palestinians of the West Bank in successive intifadas.

The Palestinian issue also seems no closer to resolution.

What the Gulf Arabs are saying with these recognitions is that the seemingly irreconcilable Palestinian-Israeli conflict can no longer be permitted to interfere with the Arabs’ pursuit of allies in the conflict that more immediately concerns them — that of Iran against the Sunni Arab nations of the Persian Gulf.

The Palestinians are the losers here, having lost their veto power over Arab nations establishing ties to Israel. As for the Israeli-Palestinian conflict, it seems even further from resolution.

The “deal of the century” peace plan midwifed by Jared Kushner projected a Palestinian state on two-thirds of the West Bank. The rest of the West Bank, now occupied by half a million Jewish settlers, would be ceded to Israel.

Any Palestinian leader who signed away Jerusalem and a third of the West Bank to Israel would risk ending up like Matthias Erzberger, who signed the Versailles Treaty in Paris for Germany and was assassinated in the Black Forest in August 1921.

Other conflicts in the region contradict the notion of a coming era of peace. Syria’s civil war, where Russia, Hezbollah and Iran are supporting the Damascus regime of Bashar Assad is unfinished, though Assad has regained control of most of his country.

The Yemen civil war remains a bloody and inconclusive conflict between a Saudi-backed regime which was driven out of the capital by Houthi rebels five years ago. U.S.-backed Saudi airstrikes have made of the country a human rights catastrophe. There is even talk of war crimes charges being brought against Riyadh for its bombings, and the United States for having sustained and supported those airstrikes.

In Libya, a civil war is underway between the recognized regime backed by Turkey and rebels backed by the UAE, Russia and Egypt.

In the Eastern Mediterranean, there is a naval stand-off between NATO allies Greece and Turkey over who owns the oil and gas below the seas off Cyprus and the Greek islands closest to the Turkish coast.

Then there is the undeclared war being waged against Iran by Israel and to which the U.S. is contributing with the crushing sanctions it has imposed to weaken and to isolate the ayatollah’s regime.

U.S. military action against Iran, before Election Day, long advocated by hawks in this city and Israel, cannot be ruled out.

As for the Afghan civil war, in which the U.S. has been engaged for 19 years, it remains unresolved, though the Taliban have begun talks with the Kabul government. Then there is the endless Turkish-Kurd conflict inside Turkey that has spilled over into Iraq and Syria.

In establishing embassies in Israel, the UAE and Bahrain are taking a risk, making a wager on who will emerge as dominant in the Middle East.

While the UAE is a significant power in the Persian Gulf, Bahrain is a collection of islands of 300 square miles with a population fewer than two million people, a Sunni king and a Shiite majority.

Though home port to the U.S. Fifth Fleet, it is vulnerable.

A decade ago, the king was almost dethroned by a Shiite uprising sparked by the Arab Spring. Saudi Arabia had to send an army across the causeway to put down the resistance and save the regime.

Even Israel is not truly at peace today, with its drones, planes and missiles intermittently striking Iranian-backed militia in Lebanon, Syria and Iraq. Still, all in all, this week brought good news on at least one front of the Middle East’s forever wars.

A hospital in Germany was the target of a severe ransomware attack in early September, which resulted in “extensive IT failure,” preventing one patient from receiving urgent care, marking a rare instance in which ransomware directly contributed to a death. 

“There is currently an extensive IT failure at the University Hospital Düsseldorf (UKD),” UKD hospital officials said in a statement on Sept. 11. “This means, among other things, that the clinic can only be reached to a limited extent – both by telephone and by email. Planned and outpatient treatments will also not take place and will be postponed. Patients are therefore asked not to visit the UKD – even if an appointment has been made.”

According to hospital officials, the ransomware attack took place on Sept. 11 and led to a significant failure of IT systems and databases. 

“In addition, the clinic cannot be reached by email,” the statement read. “Except for a few extensions, the telephone system is already back in operation. The care of patients who are already being treated as inpatients at the UKD is still guaranteed.”

The consequence of the outage forced hospital officials to shift patients to other medical facilities and postponed operations. One death was attributed to the hack after a woman in desperate need of urgent care was rerouted to another hospital in the metro area for treatment. She was transported 20 miles to a hospital in Wuppertal, said RT News, with doctors indicating the delay in treatment was fatal. As a result, local police have opened up a homicide investigation in connection with the incident. 

RT also notes the ransomware encrypted 30 serves at the hospital, holding much of its IT systems and databases hostage. Hospital officials said the ransomware did not come with explicit instructions to wire money or cryptocurrency but instead had instructions on contacting the hackers.

Systems were being “gradually restored and that it doesn’t believe that any of the affected data will be irretrievably lost,” RT said. 

The attack is the first reported death from ransomware. Hospitals have often been targeted by hackers because critical IT systems and databases of these facilities increase the probability the victims will pay their extortionists.

While hospitals are often the target, entire municipalities have been hit with aggressive ransomware attacks. We noted in 2019, “coordinated” ransomware attacks hit at least 23 cities in Texas. 

A cryptocurrency ransomware paralyzed the city of Baltimore as hackers disabled critical communication networks last year. 

In 2018, a small Florida city called Lake City paid ransomware extortionists around $462,000 to unlock critical IT networks. 

Even with all the technology available to hospitals and municipalities, hackers continue to penetrate critical systems and extort millions of dollars per year. 

Authored by Jonathan Turley,

In Harry Potter, Albus Dumbledore told the students of Hogwarts School of Witchcraft and Wizardry that “It takes a great deal of bravery to stand up to our enemies, but just as much to stand up to our friends.” 

Many are learning the truth of that line written by famed author JK Rowling as self-described progressives burn her books or ban them from shelves because she personally holds an opposing view of gender.  Much like the boycott movement of Chick-Fil-A over comments by its CEO, people are seeking to punish Rowling through attacks on her literature. 

We previously discussed the embracing of art destruction as analogous to book burning, but now actual book burning is being embraced as a weapon of the woke.

A TikTok series show people around the world burning copies of Rowlings’ books. In one video of a burning pile of books by TikTok user @elmcdo, a voice is heard saying

“You have to stop using ‘death of the author’ as an excuse to have your cake and eat it too. While the reader’s perspective is an important part of interpretation and meaning, it is impossible to completely divorce a work from its creator. The positive impact that J.K. Rowling’s work had on millions of readers does not negate how her hateful lobbying has affected the trans community.”

That sums up the logic of every book burner in history.  You cannot read a book because of the views or religion or identity of the author.  It is better to burn the book to protect society.

Then there is Rabble Books and Games in Maylands, Perth. The owner owner Nat Latter proudly declared on Facebook that he had removed all of the Harry Potter books from bookshelves to guarantee “a safer space for our community.” So you can buy a Rowlings book by having it retrieved from behind the back room like pornography.  It is a form of censoring by making it more difficult to buy some books rather than others because you disfavor authors with opposing views.

Latter seems to relish the role of a book censoring book seller:

“Whilst stocking a book isn’t an endorsement (good grief, that would be a minefield), and we will always take orders for books that aren’t in stock, there are more worthy books to put on the shelf, books that don’t harm communities and won’t make us sad to unpack them.”

Does Latter also hide works with opposing views on gender from the Bible to the Koran to classic novels?  Indeed, why not pull all of the work of authors like Hemingway and others for their views of women or race relations or other issues? Book sellers used to be people who wants to be gateways to knowledge and a world of different ideas and values. Now readers are being protected from even seeing the name of an author who personally holds opposing or offensive views.

What is most disturbing is not the flawed rhetoric of these individuals in justifying book burning and speech regulation but the relative silence from communities as a whole. We have seen increasing pressure to regulate art based on the identity or gender of artists.  Authors often hold unpopular views from society as a whole. Many are deeply religious or hold narrow views of certain social institutions or rights. These views are often not reflected in their art or writings. Indeed, Rowlings is viewed as extremely liberal but holds a narrow view of gender. We can debate her on those views and denounce those that we find hateful or intolerant. However, burning or banning or hiding books (or destroying art) is the ultimate attack on free speech. It is the signature of oppression from the China’s Qin Dynasty to the Nazis to Southern segregationists. Saying that you are different because you are acting in defense of others is a transparently weak rationalization. Declaring intolerance in the name of tolerance captures the very illogic of book burning.

Thankfully, this remains a small minority of activists but there is a more pronounced anti-free speech movement growing in this and other countries.

These actions only prove again what Albus Dumbledore said (and J.K. Rowlings wrote): “Dark times lie ahead of us and there will be a time when we must choose between what is easy and what is right.”

The UK witnessed new record coronavirus case numbers reported in a single day since May on Saturday, logging over 4,420 confirmed infections. 

And now authorities are getting desperate, threatening severe law enforcement measures and penalties, with the latest being that those who test positive but refuse to self-quarantine can be hit with a fine up to $13,000 (or 10,000 pounds).

It comes after Prime Minister Boris Johnson confirmed the country is undergoing an “inevitable” second wave of infections on Friday.

“Obviously, we’re looking carefully at the spread of the pandemic as it evolves over the last few days, and there’s no question, as I’ve said for several weeks now, that we could expect, and we are now seeing, a second wave coming in,” Johnson said.

He referenced case number spikes seen in nearby Spain and France, saying that it’s “absolutely inevitable, I’m afraid, that we would see it in this country.”

The new harsh penalty of the equivalent of a $13,000 fine takes effect by the end of this month, per the AP:

The new rule obliges people to self-isolate if they test positive for the coronavirus or are traced as a close contact. The rule comes into effect on Sept. 28.

The government will help those on lower incomes who face a loss of earnings as a result of self-isolating with a one-time support payment of 500 pounds ($633).

Amid continuing protests in London by Britons fed up with restricted freedoms, including mask and social distancing mandates and security crackdowns, PM Johnson’s latest comments also strongly hinted that a second lockdown is on the table, such as Israel is experiencing.

“I don’t think anybody wants to go into a second lockdown, but clearly when you look at what is happening, you’ve got to wonder whether we need to go further than the rule of six that we brought in on Monday,” Johnson said.