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Trevor Milton, CEO and Founder of US Nikola, speaks during a presentation of his new all-electric and hydrogen fuel cell battery truck in collaboration with CNH Industrial at an event on December 2, 2019 in Turin, Italy.

Massimo Pinca | Reuters

Competitive electric vehicle startup Nikola is paying $ 8.1 million in legal fees for ousted founder and chairman Trevor Milton, who left the company in September over a short seller fraud case that led to federal investigations.

This helped increase the company’s legal expenses to $ 27.5 million last year. Most of that, $ 24.7 million, was spent answering regulatory investigations and other litigation related to Hindenburg Research’s claims, Nikola said in its annual filing Thursday with the Securities and Exchange Commission.

According to the company, around $ 1.5 million in Milton’s legal fees were paid in 2020. The start-up lost $ 384.3 million last year, including $ 147.1 million in the fourth quarter, it said on Thursday. Adjusted pre-tax loss for 2020 was $ 200.5 million.

As part of the result, Nikola also lowered delivery expectations for its first product, called Tre Semitruck, from 600 this year to 50-100 due to supplier issues. The company’s shares fell at $ 19.72 each during after-hours trading after Thursday’s close Share, down 6.8% for the day.

“The pandemic has caused significant supply chain disruption,” Nikola CEO Mark Russell said during a call for earnings, specifically referring to a shortage of battery cells to power his vehicles.

A Nikola spokeswoman declined to comment on whether the company will attempt to recoup Milton’s legal fees. In his filing, Nikola said the fees were part of his compensation agreement with the company. Additional legal costs are expected this year related to the Hindenburg report, which led to investigations by the SEC and the Justice Department.

“We incurred significant costs due to the regulatory and legal issues surrounding the Hindenburg article,” Nikola said in the filing. “The total cost of these matters will depend on many factors, including the duration of these matters and the determination made.”

Hindenburg accused Milton of making false statements about Nikola’s technology to grow the company and partner with auto companies. The report, titled Nikola: How to Partner an Ocean of Lies with America’s Largest Automaker, was released two days after the announcement of a deal with General Motors that skyrocketed both companies’ shares in September . It characterized Nikola as “an intricate fraud based on dozens of lies” by Milton.

Nikola has denied and denied many of the allegations, but the company confirmed one of Hindenburg’s biggest claims – that it staged a video showing a truck that appeared to be functional but not working.

An internal investigation by Kirkland & Ellis LLP into statements made by Milton and the Company during this period has “substantially been completed”. The Chicago-based law firm has not reached a conclusion whether statements that may have been inaccurate when filed are against any law, the company said.

Jensen Huang, CEO of Nvidia, told CNBC on Thursday that he was confident about the company’s growth story even if the potential blockbuster acquisition of British chip designer Arm doesn’t take place.

“Nvidia is definitely going to be huge,” Huang replied on Mad Money when asked by Jim Cramer, the show host. Cramer asked the executive how investors should feel about Nvidia long term while the $ 40 billion deal to purchase Arm owned by Softbank is pending.

Numerous companies across the tech landscape, including California-based chipmaker Qualcomm and Microsoft, have reportedly told the Federal Trade Commission that they are concerned that the Nvidia arm deal could affect competition. The FTC, the US antitrust agency, has opened an “in-depth investigation” into the takeover, Bloomberg reported earlier this month.

Nvidia, known for its gaming graphics chips, first announced the deal in September. Shortly after it was released, Cramer told Mad Money viewers that “if Nvidia Arm Holdings can close, the stock will be unstoppable after its great multi-year run.”

Nvidia stock is up 103% in the past 12 months, compared to the S&P 500, up 22.4%. Over the past five years, the chipmaker’s shares are up nearly 1,600%.

Huang said Thursday that Nvidia’s chips will remain at the core of numerous disruptive technologies, keeping the secular tailwind in tact. A day earlier, the company had quarterly revenue of $ 5 billion, up 61% year over year. Both sales and earnings exceeded Wall Street’s expectations.

“The growth opportunities ahead for artificial intelligence, autonomous vehicles, manufacturing, industrial robotics, and 5G Edge will make us a very large company,” said Huang, who founded Nvidia in 1993, California. “I think our growth path is very exciting … We expect it to be a great year of growth for the data center, and all of this is independent of Arm,” added Huang.

At the same time, Huang was also trying to defend Nvidia’s desire to buy Arm, known for developing the chip architecture used in most of the world’s cell phones.

“We’re going to be able to give Arm so much exciting and so much technical scale to expedite their roadmap that the ecosystem will love,” he said, adding, “We’re going to get this deal done. I’m very much into that confident. ”

Last year, Nvidia completed a $ 7 billion acquisition of chip maker Mellanox Technologies. It took Chinese regulators more than 13 months to review the deal.

Nvidia shares closed more than 8% on Thursday, which was a difficult session for many tech companies as investors digested rising bond yields.

Disclosure: Cramer’s charitable foundation owns shares in Nvidia.

A representative gives a thumbs up to a customer after loading a television into a customer’s vehicle for a roadside pickup order at a Best Buy Co. retail store in Hawthorne, Calif. On Friday 27, 2020.

Patrick T. Fallon | AFP | Getty Images

Best Buy CEO Corie Barry said the pandemic has forever changed the way consumers shop – and the retailer is not waiting to adjust.

On Thursday, she outlined how Best Buy will transform its workforce, store fleet and sales strategy to focus more on e-commerce. The company is laying off thousands of employees and re-qualifying others for digital roles. It tests new stores with a smaller retail space and more space to fulfill online orders. And it is considering reducing the footprint of its nearly 1,000 stores across the country.

“The shopping behavior of customers is permanently changing in an even more digital way, and of course customers have full control over how they want to shop,” she said when he called reporters. “We believe that our strategy must take this reality into account and guide it in space and not follow it.”

Online sales in the US increased 89% to $ 6.7 billion for the fourth quarter ended Jan. 30 and represented 43% of total US sales for the three-month period.

Barry said she expects a greater percentage of Best Buy’s total sales to be on its website and app rather than in its stores. Digital sales are expected to represent approximately 40% of total US sales this fiscal year. This equates to 19% two years ago and 5% a decade ago.

Despite this rapid growth, Barry said the company’s inpatient footprint will continue to play a key role. Stores will display products and staff to help customers, but increasingly they will also serve as warehouses where staff pick up and pack e-commerce orders and convenient places for shoppers to quickly make an online purchase in the parking lot can retrieve.

New kind of business

As Best Buy spins, stores may become fewer in number and smaller.

Barry said the company will get shorter leases for its businesses going forward and have a higher bar when they come up for renewal. She said there are about 450 leases up for renewal over the next three years.

Best Buy has closed around 20 large-format stores in each of the past two years – and Barry expects a larger number of stores to close this year.

The consumer electronics retailer, known in the past for its large retail space and eye-catching gadget displays, has redesigned some stores near its headquarters in Minneapolis. The shops were rebuilt in November as part of a pilot project.

“We’re testing our hypothesis that stores may act a bit more as primary fulfillment hubs,” she said.

This is what other retailers like Target are doing to make online ordering more profitable.

At some Best Buy stores, the retail space has been nearly halved – from an average of 27,000 square feet to 15,000, Barry said. The smaller retail space only offers the most popular items, with a wider range that is kept behind the scenes and continues to be available for purchase.

Some stores are also testing a hub for the Geek Squad, a team of people who install and set up tech, and perform repairs.

So far, she said, the company is enjoying how the smaller stores have created more space for picking up online roadside and in-store orders, as well as shipping some e-commerce purchases.

A smaller workforce

The company’s workforce has already shrunk to accommodate the different ways of working.

Best Buy started the last fiscal year with 123,000 employees and ended the year on January 30th with around 102,000 – a decrease of around 17%, Barry said in an interview with investors and analysts. She said most of that reduction was due to attrition.

Earlier this month, Barry said the company had laid off and laid off approximately 5,000 employees, most of whom were full-time employees. Employees will be hired for around 2,000 part-time positions.

“Decisions like these are never easy or frivolous, but they make us more responsive and flexible as we evolve our operating model in the future to respond to the incredibly rapid change in the way customers want to shop with us.” said she said.

She noted that the company gives rewards to employees in connection with pandemics. Full-time workers get $ 500 and part-time workers get $ 200, including those who lose their jobs. And she added that employees will be trained in new roles, such as providing technical support to customers via video chat.

Some employees have criticized Best Buy for the layoffs – especially at a time when many are already struggling with other stressors, such as: B. Finding childcare during virtual learning, coping with illness in their family, or coping with the financial burden of the recent Covid-induced recession.

A group of them distributed an online petition calling for workers to be paid retrospectively. The petition says that even those who still have jobs at Best Buy are struggling to pay their bills because working hours are reduced.

Find inspiration

The right product mix is ​​also important for Best Buy’s future growth. Barry said technology will continue to play a role in people’s lives.

She said the retailer views health as an area of ​​growth as more people use wearables to track workouts at home or use telemedicine to virtually meet a doctor.

The large numbers of people working from home have inspired new products, from high-tech chairs to standing desks, she said. And she added that the technical services are a sales driver and differentiator.

Online and offline, she said, customers look to Best Buy for the same things as finding products, finding inspiration, and getting technical support.

“We have to be ready to meet all of these needs at all times across all channels,” she said.

Sinelia Louis can finally apply for a PPP loan due to changes made by the Biden administration that allow access for non-citizenship small business owners.

Sinelia Louis

When Sinelia Louis, 50, heard of the recent changes to the Small Business Administration’s paycheck protection program, she felt that her prayers had been answered.

“I cleaned and said, ‘Thank God,'” said Louis. “That gives me hope to move on, hope that my business won’t die here and now.”

Louis operates Caregivers Company LLC, a home care service that works with seniors in St. Louis. She is a sole proprietor who has tried to expand her business in hopes of hiring employees.

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When Covid hit last March it was devastating and the PPP program was a ray of hope. Louis applied for a forgivable loan in the first round but was ultimately denied due to her immigration status. She came to the US from Haiti in 1998 and is still waiting for her green card. Even so, she works legally with a business license and pays taxes with an individual tax identification number.

She can now get a PPP loan under new rules that will come into effect soon. She is preparing her documents and planning to use the priority application deadline.

PPP confusion is great

The Biden government on Monday announced major changes to the SBA’s paycheck protection program, first set up by the CARES Act to provide futile credit to companies affected by the pandemic. For a two-week period that began on Wednesday, the program will only process loans to the smallest businesses with fewer than 20 employees.

At the same time, the administration made important changes to the program, which will start in the first week of March. It will update the sole proprietorship credit calculation formula, allow some non-US residents to apply for credit, and remove previous restrictions that have delayed business owners with certain criminal convictions or access to student loan funds.

The misaligned timing of the priority application period and the start of these program changes have created both excitement and confusion among business owners, especially sole proprietors, wondering when to submit their information for an eligible loan.

“It’s déjà vu once again,” said Megan Gorman, attorney and managing partner at Checkers Financial Management in San Francisco, adding that the uncertainty reminded her of the first PPP rollout in April 2020 [small businesses] ready to go through a process that will play out when you use it? “

Small businesses with employees who are already eligible should submit their records as soon as possible, Gorman said. Those who would benefit from changes coming soon – either sole traders who would get more money, non-nationals, or those with a specific criminal background – should get their finance house in order, she said, but wait for them to be filed.

“We hope to get instructions sooner rather than later,” said Gorman.

Some companies aren’t sure if the rules apply to them

The timing of the guidelines has also created confusion for small business owners with pending applications, such as Tracy Sarris Braddock, who runs Inova Management management consulting firm in Lavon, Texas. Braddock, 53, was able to apply for a PPP loan as a sole proprietor last year and received $ 19,500.

While the loan was helpful, it wasn’t enough to make up for the business she lost due to the pandemic. As a result, she also applied for an unforgivable SBA loan for economic damage that could not be granted, and in early February submitted documents for a second PPP loan that is still outstanding.

She hopes this means it could fall under the updated calculation formula, which would result in a bigger loan – by her own rough estimate, that could mean about seven thousand dollars more.

Tracy Sarris Braddock has applied for a second drawing PPP loan to keep her small business alive. She’s not sure if it’s subject to the new sole proprietorship credit calculation formula.

Tracy Sarris Braddock

So far, the SBA has announced that small businesses will be subject to the rules in force at the time of their application. Some groups are pushing the White House for flexibility or retroactivity to help small businesses that have recently applied for credit or have pending applications.

“I am extremely optimistic that the new calculation – gross income versus net income – will apply to these claims even after they are submitted,” said Keith Hall, president and CEO of the National Association for the Self-Employed. “I think there will be a trial.”

If the current SBA guidelines are not updated, Braddock and others like her may have to settle for less money with outstanding loans.

“It’s frustrating,” she said. “As a small company, I am getting used to being kicked in the teeth.”

However, experts have generally welcomed updates to the PPP aimed at providing funding to businesses that had difficulty accessing forgivable credit in the previous round, including businesses run by women and minorities.

“If you look at when the Biden-Harris administration is trying to do this, they are trying to do the right thing,” Gorman said.

Another bumpy rollout, however, means lenders and borrowers are waiting for updates in real time and grappling with an ever-changing program as they try to apply.

In addition, time is running out for all small businesses – not even those covered by the new rules. The SBA’s program expires on March 31, and the Biden administration has not yet asked Congress to extend it. This leaves little time for all eligible borrowers to take advantage of the changes and resolve issues.

“We will run out of time if they are not extended beyond March 31,” said Chris Hurn, managing director of Fountainhead Commercial Capital. “It’s going to be a real shame because so many of these people are qualified and deserve these funds.”

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