Nikola stock drops further after report that DOJ started its probe

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Shares of Nikola Corp. dropped further Tuesday after a report by The Wall Street Journal said the Justice Department has joined the Securities and Exchange Commission in looking into allegations that the electric-truck maker has misled investors. The report, which cited people familiar with the matter, said the probe is being handled by the Manhattan U.S. attorney’s office, working in conjunction with the securities regulators, which has reportedly initiated its own probe. Spokespersons for the SEC and Manhattan U.S. attorney’s office declined to comment, as did Nikola representatives, the newspaper said. Nikola said Monday it had contacted the SEC itself last week on the wake of a report by short seller Hindenburg Research, saying it was welcoming the SEC’s involvement. Hindenburg last week said Nikola was an “intricate fraud,” to which the company responded that the note had been a “hit job” designed by greed. Hindenburg, in a note Tuesday, reiterated some of its criticism and said that the company had not fully answered or sidestepped the questions it had posed. Shares of Nikola have gained 218% so far this year, compared with gains around 5% for the S&P 500 index.
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