Shares of Nikola Corp (NKLA) jumped on Monday afternoon following comments made by Mary Barra, the CEO of new partner General Motors (GM), at an industry conference.

BACKGROUND: On last Thursday, September 10, short-selling research firm Hindenburg Research said it believes Nikola "is an intricate fraud built on dozens of lies over the course of its Founder and Executive Chairman Trevor Milton's career." The firm argued that it has "gathered extensive evidence-including recorded phone calls, text messages, private emails and behind-the-scenes photographs-detailing dozens of false statements by Nikola Founder Trevor Milton," adding that it has "never seen this level of deception at a public company, especially of this size."

Nikola denied Hindenberg's claims and said it has hired a law firm to evaluate legal recourse over the allegations. "To be clear, this was not a research report and it is not accurate. This was a hit job for short sale profit-driven by greed," Nikola said in a statement. It added that it intended to bring the actions to the attention of the SEC.

The accusations came days after the company announced a 10-year alliance with General Motors. Under the terms of the agreement, GM will engineer and manufacture Nikola's Badger pickup truck and provide its Ultium battery system and Hydrotec fuel-cell technology for Nikola's semi-trucks in exchange for an 11% stake in the company valued at $2B.

'APPROPRIATE DILIGENCE': AT Monday's RBC Capital Markets Global Industrials Conference, GM CEO Mary Barra confirmed that the automaker had done "appropriate diligence" before signing a deal with Nikola and that questions swirling around Nikola "should be referred to Nikola".

NIKOLA RESPONSE 'SO POOR': Carson Block's Muddy Waters said via Twitter, "The $NKLA response is typical, but just so poor." It added that "Repeatedly accusing @HindenburgRes of manipulation while confirming facts and arguing opinions is really discrediting of $NKLA. In my experience, investors see through this. So net-net company still has same credibility issue." Block's Muddy Waters added via Twitter that it is not short shares of Nikola and never has been. "I'm an activist short seller expressing an opinion on these events - nothing more," a tweet from the firm stated.

ANALYST COMMENTARY: JPMorgan analyst Paul Coster told investors in a research note Monday that three aspects of Nikola's business strategy are compelling: the closed-loop Hydrogen-based transportation solution, the "credible outcome" of a fuel cell electric truck leasing model, and the use of "best-in-class" partnerships to deliver trucking solutions fast and with minimal capital investment. The analyst finds Hindenberg's core criticism is "misconceived." Nikola's ability to execute by leveraging other companies' core competences, specifically GM, CNH (CMHI), and Bosch, "is a major positive, not a negative," according to Coster.

Meanwhile, Wedbush analyst Daniel Ives looks forward to management addressing some of these issues but continues to believe seeing the forest through the trees that Nikola is a story stock now and it is all about execution looking ahead through 2023.

PRICE ACTION: In afternoon trading, Nikola shares gained 11% to $35.67.