From $28 Billion to Prison: The Nikola SPAC Story

On June 4, 2020, Nikola Corporation went public through a merger with VectoIQ Acquisition Corp. Within days, the company reached a market capitalization of $28 billion — making it more valuable than Ford Motor Company. Nikola had never built a truck. It had never sold a truck. It had never generated a dollar of revenue from truck sales. Its founder would later be convicted of fraud and sentenced to four years in federal prison.

This is the complete story of the most spectacular SPAC fraud in history.

Act I: The Vision (2014-2020)

Trevor Milton founded Nikola Motor Company in 2014, naming it after Nikola Tesla — the other half of the famous inventor that Elon Musk hadn't claimed. Milton's pitch was bold: hydrogen-powered semi-trucks that would revolutionize freight transportation. Zero emissions. Lower total cost of ownership than diesel. A nationwide hydrogen fueling network. The future of trucking.

The pitch was compelling because it addressed a real problem — long-haul trucking is one of the hardest sectors to decarbonize, and hydrogen fuel cells have genuine advantages over batteries for heavy vehicles. But there was a gap between the vision and reality. A very large gap.

Milton was a gifted promoter. He made the rounds on podcasts, social media, and industry events, painting a picture of a company that was on the verge of transforming transportation. He showed renderings of sleek, futuristic trucks. He announced partnerships. He tweeted about proprietary technology breakthroughs.

Act II: The SPAC Merger and the Euphoria (June 2020)

VectoIQ Acquisition Corp, a SPAC run by former General Motors executive Steve Girsky, announced its merger with Nikola in March 2020. The deal closed on June 4, 2020. Within days, Nikola stock rocketed from $10 to over $93 — a 830% gain in less than two weeks.

At its peak price of $93.99, Nikola was valued at $28 billion. For context, this was more than:

• Ford Motor Company (which sells 4 million vehicles per year)
• Fiat Chrysler (which sells 4.4 million vehicles per year)
• The combined market cap of several actual truck manufacturers

Nikola's revenue at the time: $0. Trucks delivered: 0. Factories built: 0.

Act III: The Video — A Truck Rolling Downhill

In January 2018, Nikola had released a promotional video titled "Nikola One in Motion." The video showed a sleek hydrogen semi-truck driving smoothly down a road, seemingly under its own power. The video was viewed millions of times and was central to Nikola's narrative that it had a working prototype.

On September 10, 2020, Hindenburg Research — the short-selling firm that would become the most feared name in finance — published a devastating report titled "Nikola: How to Parlay An Ocean of Lies Into a Partnership With the Largest Auto OEM in America."

The report revealed that the Nikola One had no motor, no drivetrain, and no ability to move under its own power. The promotional video was filmed by placing the truck at the top of a slight incline and letting gravity do the work. The camera angle was carefully chosen to make the downhill road appear flat. Nikola had never denied this publicly, but they had never disclosed it either — and the video was explicitly used to attract investors and partners.

Act IV: The Unraveling (September 2020 - 2023)

The Hindenburg report triggered a cascade of events:

September 2020: Trevor Milton resigned as Executive Chairman. The stock dropped 30% in a single day. General Motors, which had announced a partnership with Nikola just days before the Hindenburg report, began distancing itself.

July 2021:Milton was indicted on three counts of criminal fraud by the U.S. Attorney for the Southern District of New York. The charges alleged that Milton made false and misleading statements to investors about Nikola's technology, products, and business prospects.

October 2022:A federal jury convicted Milton on one count of securities fraud and two counts of wire fraud. He was found guilty of lying to investors about nearly every aspect of Nikola's business.

December 2023: Milton was sentenced to four years in federal prison and ordered to pay $1 million in fines, forfeit $42 million, and pay $165 million in restitution.

December 2023:Nikola agreed to pay $125 million to settle SEC civil fraud charges related to Milton's misrepresentations.

Act V: Bankruptcy (February 2025)

On February 19, 2025 — 56 months after going public — Nikola filed for Chapter 11 bankruptcy. The company that was once worth $28 billion ended with a stock price of $0.46. The total percentage loss: -99.5%.

Nikola did eventually build some trucks. It delivered a few hundred battery-electric and hydrogen fuel cell trucks before the end. But the volumes were a fraction of projections, the costs were unsustainable, and the hydrogen fueling infrastructure never materialized. The vision was real. The company wasn't.

The Damage

What Nikola Tells Us About SPACs

Nikola is the extreme case, but it illustrates the systemic problems with SPACs in their purest form:

The due diligence gap:VectoIQ, the SPAC sponsor, was run by an experienced auto industry executive. And yet the merger went through without anyone apparently verifying that the promotional video showed a functional truck. In a traditional IPO, underwriters conduct months of due diligence and face legal liability. In a SPAC, the sponsor's incentive is to close the deal.

Forward projections as fraud:Nikola's merger presentation included detailed revenue projections showing billions in future sales. These projections were protected by safe harbor provisions that apply to SPACs but not to traditional IPOs. Milton used these projections to paint a picture of a company that existed only in PowerPoint.

Retail investor targeting: Nikola stock was heavily promoted on social media and retail trading platforms. The $28 billion peak was driven largely by retail enthusiasm, not institutional conviction. When the fraud was exposed, institutions had already moved on. Retail investors held the bag.

Trevor Milton is in prison. The money is gone. And the structure that enabled it all — the SPAC — continues to exist, with the same fundamental incentive problems, ready for the next cycle.

Timeline reconstructed from SEC filings, DOJ indictment and sentencing documents, Hindenburg Research reports, and public market data. All figures verified against official sources.