Nikola Corp.’s founder cost a San Diego man about $160,000 trading the company’s hyped shares, he told the jury in Trevor Milton’s criminal fraud trial.

Joseph Ryan was called to the witness stand Thursday by federal prosecutors, who allege that Milton misled investors by exaggerating the electric truck maker’s progress toward introducing vehicles for sale and by lying about Nikola’s technology and partnerships. 

Ryan told the jurors he bought shares based on public statements by Milton that the company had succeeded in slashing the cost of hydrogen fuel from $16 a kilogram to less than $4. He told the panel it would have affected his investment decisions if he had known Nikola was actually buying hydrogen at $14 a kilogram rather than producing it.

He testified that he also invested based on Milton’s claims that Nikola was moving toward commercial production of the Badger pickup, and that he was misled by a video that appeared to show a Nikola semi truck prototype traveling under its own power, when in fact it was rolling downhill thanks to gravity.

Risky Trading

Ryan, who said he had done some day trading, told the jurors Milton’s interviews and videos convinced him to hold Nikola stock for the long term.

“It sounded like they were making great progress in every aspect of what they were targeting, whether it be hydrogen production, the truck or the consumer truck, the Badger,” he said.

Read More: Nikola CEO Says He Learned Truck Had No Power After His Hire 

On cross-examination, Ryan agreed that Securities and Exchange Commission filings are a more reliable source of company information than press interviews, as Milton lawyer Marc Mukasey suggested that day trading is risky. The defense argues Milton was just following the company’s marketing plan and never said anything he didn’t believe to be true.

The trial comes two years after Milton abruptly resigned from the company’s board, following scrutiny once Nikola listed its shares in June 2020. The stock’s initial surge turned small investments by hedge funds and others into stakes worth billions of dollars at the time, reflecting optimism that Nikola could become a Tesla-like disruptor. 

All GM

Individual investors, too, piled into the stock, which collapsed in the wake of a short-seller’s report and which is down 24.3% from its close before opening arguments began on Sept. 13.

Milton, 40, is charged with securities and wire fraud and faces a maximum prison term of 25 years if convicted of the most serious charge. The defense has cited “a distortion of Trevor Milton’s words, a distortion of Trevor Milton’s meanings, a distortion of Trevor Milton’s intentions.”

Read More: Nikola Founder Milton Went Rogue on Social Media, Jury Is Told

The prosecution witness before Ryan was Scott Damman, a senior manager at General Motors Co. whom GM sent to work with Nikola. Damman testified that Milton had falsely claimed Nikola was responsible for most of the parts in the planned Badger pickup truck GM was to build for the EV maker.

“There were no components coming from Nikola,” Damman told the jury in federal court in Manhattan. “They owned the creative design, what the vehicle looked like and felt like, but all of the parts were to come from General Motors.”

‘70% Nikola’

Damman’s testimony came in response to questioning about a video interview Milton gave in 2020. 

“It’s probably 70% Nikola, 30% GM, when it comes to the parts that are really important to us,” Milton said in the interview that September, the same month the Detroit car maker announced it would build and provide technology for the Badger in return for payments and an 11% equity stake. 

The relationship between Nikola and GM was to be brief. The short-seller’s report came just days after the partnership was announced that month, accusing Milton and Nikola of deception. By November, GM had scaled back its commitment and dropped its plans for the stake. The Badger was scrapped. 

Nikola took $5,000 down payments for Badger reservations in June 2020, when it had no prototype or plan to manufacture the pickup. Public discussion of the truck bolstered the stock, with promises a prototype would be revealed at an event later that year. That unveiling, too, was canceled.

Ryan told the court he continues to hold his Nikola shares. He said he may offset the gains he’s made on other investments with his Nikola losses, or just hope to profit if the company is acquired.

The case is US v. Milton, 21-cr-478, US District Court, Southern District of New York (Manhattan)