General Motors is understandably considering revisions to its deal with Nikola Corp following the recent hullabaloo that tanked the startup's stock. Allegations had surfaced that founder Trevor Milton had misled investors by promising technologies that did not yet exist, forcing him to leave Nikola's ranks right around the time the Securities and Exchange Commission decided to get involved.

Obviously, critics said this made GM look as though it was run by morons. Last month, the Detroit automaker agreed to take an 11 percent stake in Nikola while also planning to build its all-electric Badger pickup and sharing its hydrogen tech to help spur development. But it seems as though this was being done on little more than Milton's word that Nikola was the real deal. General Motors does not appear to have done its due diligence in vetting the company's true capabilities. While the obvious remedy would seem to be to distance itself from the now-tainted brand, GM is actually rumored to be considering expanding its interests in Nikola now that its share price has declined.

Both CNBC and Bloomberg claimed unnamed insider sources have told them GM may very well try and take a larger slice of the startup and was in the process of renegotiation its initial deal. While that seems rather foolish if the company was selling itself under false pretenses, Nikola has adamantly denied it misled investors as it simultaneously canceled an important conference to showcase what it's been working on.

From Bloomberg:
Since the deal was announced on Sept. 8, Nikola stock has fallen by more than half and GM has sought better terms before closing, said the people, who asked not to be identified because the discussions are private. GM could push to raise its equity in Nikola beyond the planned 11 [percent] or seek warrants that would guarantee or even increase that level of ownership if the company raises more money.

GM's due diligence on the startup has been questioned after a short seller accused Nikola of overstating its capabilities and know-how. The allegations - and federal regulatory probes into those claims - sent the Phoenix-based company's stock price into a downward spiral. Nikola has denied the allegations against it and Trevor Milton, the company's founder and former chairman.
The SEC has since gotten involved, which short-seller Hindenburg said was a great idea after it successfully impacted Nikola's stock. While its ultimate goal was to expose the company for its alleged deception, Hindenburg said it had hoped to profit from the actions taken. Meanwhile, Nikola doesn't seem all that perturbed that it will be placed under a microscope.

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

Meanwhile, Nikola named Steve Shindler to its board on Thursday as a replacement for Lonnie Stalsberg this week. Shindler has served as the managing partner of VectoIQ LLC, the acquisitions company that arranged for Nikola to go public through a reverse merger, through June of 2020. Interestingly, VectoIQ was run by Stephen Girsk - a former vice chairman of General Motors who now serves as the chair of Nikola's board. He runs several "emerging technology" firms, was instrumental in helping broker the partnership between the two companies, and presumably has some idea why GM was so keen to get a piece of the action.

a version of this article first appeared on TTAC