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Federal prosecutors have unveiled a new charge against Nikola founder Trevor Milton related to his purchase of a Utah ranch.
Milton allegedly misrepresented the state of Nikola’s business to convince the seller of the ranch to accept a company stock option as partial payment.
It’s the fourth charge against Milton, who maintains his innocence.

CEO and founder of U.S. Nikola, Trevor Milton speaks during presentation of its new full-electric and hydrogen fuel-cell battery trucks in partnership with CNH Industrial, at an event in Turin, Italy December 2, 2019.
Massimo Pinca | Reuters

The founder of electric truck start-up Nikola Motors, already under indictment for multiple counts of fraud, is facing a new charge related to buying a Utah ranch — a purchase he paid for in part with an option to buy Nikola stock.
Federal prosecutors in the Southern District of New York on Wednesday charged Trevor Milton with a new count of wire fraud, alleging he misrepresented the state of Nikola’s business to convince the seller of the Wasatch Creek Ranch to accept an option to buy Nikola stock as partial payment for the ranch around April 2020.

The new count is the fourth federal charge against Milton. In July 2021, a federal grand jury charged Milton with three counts of criminal fraud for allegedly lying about “nearly all aspects of the business” to bolster sales of the electric vehicle company’s stock.
The option to buy Nikola stock would have allowed the seller of the ranch, Peter Hicks, to buy more than 500,000 shares of the company at what was then a discounted price of $16.50 per share, prosecutors charge.
Nikola’s stock price briefly surged to more than $60 in June 2020, but fell sharply after Milton was forced out of the company amid allegations of fraud in September of that year. The company shares were trading at $5.60 late Wednesday.
Attorneys for Milton did not immediately respond to a request for comment.
Prosecutors charge Milton built an intricate scheme designed to pump up the company’s stock for his own gain by lying about Nikola’s products, technology and future sales prospects. They accuse him of using Nikola’s deal to go public via a special purpose acquisition company to target amateur retail investors, some of whom lost hundreds of thousands of dollars.

In his civil suit against Milton, Hicks alleged that Milton made similar representations to convince him to accept the stock option in payment for the ranch.

Many of the allegations regarding Milton’s allegedly false and misleading statements were first uncovered by short seller Hindenburg Research.
Milton, who’s still awaiting trial, has maintained his innocence. He pleaded not guilty to the criminal charges in a New York courtroom last year.
However, following an internal investigation, Nikola said in February that it found its founder made several inaccurate statements from 2016 through the company’s IPO that misled investors in June 2020.
In December, Nikola agreed to pay the Securities and Exchange Commission $125 million to settle charges it defrauded investors by misleading them about its products, technical capacity and business prospects.
Nikola was the catalyst for electric vehicle start-ups to go public through SPAC deals. Investor interest in such companies soared after Tesla’s stock skyrocketed to make it the world’s most valued automaker by market cap in 2020.

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Alibaba shares are still lower year-to-date despite a recent rebound in Chinese internet stocks.
Across five major e-commerce platforms’ GMV, Alibaba’s market share fell by 6% in the first quarter versus the fourth, according to Bernstein analysis published early this month.
“Our top picks in the sector remain JD, Meituan, Pinduoduo, and Kuaishou,” Bernstein analyst Robin Zhu and a team said in a report this week. “Interest in Alibaba has persisted, chiefly from overseas investors, while feedback on Tencent has become very negative.”

Across five major e-commerce platforms’ GMV, Alibaba’s market share fell by 6% in the first quarter versus the fourth, according to Bernstein analysis.
Str | Afp | Getty Images

BEIJING — Alibaba was once the poster child for investing in modern China. Now the e-commerce market that fueled its growth is slowing, while new players eat away at Alibaba’s market share.
That’s reflected in the stocks’ performance since an apparent bottom in sentiment on major Chinese internet names in mid-March.

Pinduoduo shares have more than doubled since then, while Meituan shares have climbed 80%, and JD shares are up more than 50% in Hong Kong. Kuaishou is up by nearly 47%.
Alibaba shares have climbed about 42% in Hong Kong, and 33% in New York. Tencent is up only about 25%.
But except for Kuaishou and Pinduoduo, the stocks are still down for the year so far.
“Our top picks in the sector remain JD, Meituan, Pinduoduo, and Kuaishou,” Bernstein analyst Robin Zhu and a team said in a report this week. “Interest in Alibaba has persisted, chiefly from overseas investors, while feedback on Tencent has become very negative.”

Bernstein expects consumer and regulatory trends to favor stock plays in “real” categories — e-commerce, food delivery and local services — over “virtual” ones — gaming, media and entertainment.

A slowing e-commerce market

Over the weekend, the 6.18 shopping festival spearheaded by JD.com saw total transaction volume rise by 10.3% to 379.3 billion yuan ($56.61 billion). That is a new high in value — but the slowest growth on record, according to Reuters.
Merchants who spoke with Nomura said Covid lockdowns disrupted apparel production, while consumer demand was generally low, according to a Sunday report. High-end product sales fared better than mass-market ones, the report said, citing a merchant.
Alibaba, whose main shopping festival is in November, only said it saw growth in gross merchandise value from last year, without disclosing figures. GMV measures total sales value over a certain period of time.

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“Online retail growth is likely to be slower this year than in 2020 and 2021, and its gain in penetration rate may be weaker than the average of 2.6 [percentage points] during 2015-2021,” Fitch said in a report last week.
“This is due to a larger base, deeper integration of online and offline channels … and weaker consumer confidence on concerns of a slowing economy and rising unemployment,” the firm said. Fitch expects online sales of food and household goods to perform better than that of apparel.
In May, online retail sales of goods surged by more than 14% from a year ago, but overall retail sales fell by 6.7% during that time.
Fitch expects China’s retail sales to only grow by low single digits this year, versus 12.5% in 2021. But the firm expects online sales of goods can expand its share of total retail goods to around 29% in 2022, versus 27.4% in 2021 and 27.7% in 2020.

New players grab Alibaba’s market share

In that online shopping market, new companies have emerged as rivals to Alibaba. These include short-video and livestreaming platforms Kuaishou and Douyin, the Chinese version of TikTok also owned by ByteDance.
Across five major e-commerce platforms’ GMV, Alibaba’s market share fell by 6% in the first quarter versus the fourth, according to Bernstein analysis published early this month.
JD, Pinduoduo, Douyin and Kuaishou all grew market share during that time, the report said. Douyin’s GMV share increased the most, by 38%, although its combined market share with Kuaishou is only about 12% among the five companies.

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In a sign of how Kuaishou has emerged as its own e-commerce player, the app in March cut off links to other online shopping sites.
“Their recent decision to cut off external links to [Alibaba’s] Taobao and JD shows that times have changed,” Ashley Dudarenok, founder of China marketing consultancy ChoZan, said at the time of the news. “Taobao is no longer the only main battlefield for e-commerce.”
In the quarter ended March 31, Kuaishou reported GMV on its platform of 175.1 billion yuan, a surge of nearly 48% from a year ago.
Last month, ByteDance’s Douyin claimed its e-commerce GMV more than tripled in the last year, without specifying when that year ended. Douyin banned links to external e-commerce platforms in 2020.
While Douyin dwarfs Kuaishou by number of users, what’s different for investors wanting to play the short-video e-commerce trend is that Kuaishou is publicly listed.
Even in JPMorgan’s prior call in March to downgrade 28 “uninvestable” Chinese internet stocks, the analysts kept their only “overweight” on Kuaishou based on “management’s sharper focus on margin improvement, higher gross margin, larger user base and less competition risk.”
Users like cosmetics livestreamer Zhao Mengche often describe Kuaishou as having a “community,” in which he said the app is trying to integrate more brands and mimic a village market square — online. Zhao has more than 20 million followers on Kuaishou.
During this year’s 6.18 shopping festival, fashion-focused social media app Xiaohongshu claimed more merchants made their products available directly on the app, and said users could buy imported JD.com products through Xiaohongshu as well.

Ad spending declines

Looking ahead, companies were more inclined in the first quarter to spend on advertising closest to where consumers might make a purchase, rather than just building awareness, according to Bernstein. They estimated growth of 65.8% in Kuaishou e-commerce ads in the first quarter from a year ago, with Pinduoduo, JD and Meituan also seeing double-digit growth.

However, revenue across the top 25 advertising platforms tracked by Bernstein grew by 7.4% year-on-year in the first quarter, slower than 10.8% growth in the prior quarter.
And for ByteDance — the largest advertising platform in China in the first quarter alongside Alibaba — Bernstein estimated domestic ads grew by only 15% in the first three months of the year, despite livestreaming sales GMV likely nearly tripling, the analysts said.
They expect ByteDance’s domestic ads business to slow to the single digits, or even contract, in the second quarter.
— CNBC’s Michael Bloom contributed to this report.

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It’s that time again! “Mad Money” host Jim Cramer rings the lightning round bell, which means he’s giving his answers to callers’ stock questions at rapid speed.

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Rocket Companies Inc: “I said the Fed was raising rates: you can’t own anything in that area. And the Fed is still raising, so you still can’t.”

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Marvell Technology Inc: “It’s driving me bonkers that it could be doing so well and it’s stuck right here, down so much. But we’re sticking with it.”

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Vertex Pharmaceuticals Inc: “I like it very much. … I just have been trying to figure out exactly whether that drug is going to be passed, and I don’t know the answer.”
Disclosure: Cramer’s Charitable Trust owns shares of Devon Energy and Marvell Technology.

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Retail holding company Franchise Group is weighing lowering its bid for Kohl’s to closer to $50 per share from about $60, according to a person familiar with the deal talks.
The owner of The Vitamin Shoppe is actively considering whether or not buying Kohl’s is the best use case of Franchise Group’s capital, said the person.
Kohl’s shares closed Wednesday at $38.61 and traded as low as $34.64 in late May.

People walk near a Kohl’s department store entranceway on June 07, 2022 in Doral, Florida. Kohl’s announced that it has entered into exclusive negotiations with Franchise Group, which is proposing to buy the retailer for $60 per share. 
Joe Raedle | Getty Images

Retail holding company Franchise Group is weighing lowering its bid for Kohl’s to closer to $50 per share from about $60, according to a person familiar with the deal talks.
Kohl’s shares closed down nearly 9% on Wednesday at $38.61 per share. They traded as low as $34.64 in late May. Franchise Group shares ended the day up about 1% at $36.08 per share.

Franchise Group, owner of The Vitamin Shoppe and other retailers, is actively considering whether buying Kohl’s is the best use case of Franchise Group’s capital, said the person, who asked to remain anonymous since the conversations are private and ongoing. The company is growing concerned that the environment for certain retailers could become bleaker from here, particularly if the U.S. were to enter a recession, the person said.

Franchise Group has lined up financing with lenders, the person added. But the company, run by Chief Executive Officer Brian Kahn, is weighing a lower price now as retailers in general grapple with bloated inventory and higher prices.
Big-box retailer Target said earlier this month that it will take a short-term hit to profits as it cancels orders and marks down unwanted merchandise ahead of the busy back-to-school and holiday shopping seasons. Analysts expect many retailers will have to take a similar hit, and it could be a bigger blow for the ones that aren’t as successful moving products off shelves.
Earlier this month, Franchise Group proposed a bid of $60 per share to acquire Kohl’s at a roughly $8 billion valuation. The two companies then entered an exclusive three-week window during which they can firm up any due diligence and final financing arrangements. That ends this weekend.
The off-mall department store chain was first urged to consider a sale or another alternative to boost its stock price in early December 2021 by New York-based hedge fund Engine Capital. At the time, Kohl’s shares were trading around $48.45.

Then, in mid-January, activist hedge fund Macellum Advisors pressured Kohl’s to consider a sale. Macellum’s CEO, Jonathan Duskin, argued that executives were “materially mismanaging” the business. He also said Kohl’s had plenty of potential left to unlock with its real estate.
Earlier this year, Kohl’s received a per-share offer of $64 from Starboard-backed Acacia Research, but deemed the bid to be too low.
In mid-May, Kohl’s reported that its sales for the three-month period ended April 30 fell to $3.72 billion from $3.89 billion in 2021.
The retailer slashed its profit and revenue forecasts for the full fiscal year, which also muddied the picture for a potential deal.
Representatives for Kohl’s and Franchise Group didn’t immediately respond to CNBC’s requests for comment.

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The Harry E. Reed Insurance Agency of Millinocket, Maine, is facing criticism for posting a racist sign on Juneteenth.
Yelp disabled users’ ability to post on the company’s page.
National insurer Progressive cut ties with the local affiliate.

Google Earth view of Reed Agency in Millinocket, Maine.
Google Earth

An insurance agency in Millinocket, Maine, is facing online backlash after a photo circulated on Facebook of a sign taped to the business’s door on Monday saying, “Juneteenth ~it’s whatever… We’re closed. Enjoy your fried chicken & collard greens.”
The image of the sign at the Harry E. Reed Insurance Agency, an affiliate of national insurer Progressive, was originally shared by a Facebook user named Alura Stillwagon, with the caption, “The racism in Millinocket is real.” The original post has been shared more than 100 times.

The insurance agency did not respond to CNBC’s requests for comment.
“I’m not angry. Anger gets you nowhere. I’m just deeply, deeply disappointed,” another Facebook user, Ken Anderson, commented on the post. “In this business, in the companies that let this business broker their products, and in the town of Millinocket, in the state of Maine, and the whole damn country. Deeply disappointed. Why? Because I know we can do better. But we’re not trying. And that’s the part that cuts deepest.”
For many businesses, Monday marked the observance of Juneteenth, a federal holiday that commemorates June 19, 1865, when Union Army soldiers arrived in Texas and announced the end of slavery to more than 250,000 Black people who remained enslaved even after the signing of the Emancipation Proclamation in 1863, according to the National Museum of African American History and Culture.
Since the image of the sign began circulating online, people have taken to online review site Yelp to condemn the insurance agency, prompting Yelp to disable users’ ability to post on the company’s page.
“This business recently received increased public attention resulting in an influx of people posting their views to this page, so we have temporarily disabled the ability to post here as we work to investigate the content,” an alert on the Harry E. Reed Insurance Agency’s Yelp page reads. “While racism has no place on Yelp and we unequivocally reject racism or discrimination in any form, all reviews on Yelp must reflect an actual first-hand consumer experience (even if that means disabling the ability for users to express points of view we might agree with).”

The agency received nearly 90 — largely one-star — Yelp reviews, with many posters condemning the insurance agency as “racist.”
Jeff Sibel, a spokesperson for Progressive, said in a statement, “We’re aware and appalled by the sign recently posted at the Harry E Reed Agency and are terminating our relationship with the agency.”

“At Progressive, Diversity, Equity and Inclusion (DEI) are fundamental to our Core Values. We’re committed to creating an environment where our people feel welcomed, valued and respected and expect that anyone representing Progressive to take part in this commitment. The sign is in direct violation of that commitment and doesn’t align with our company’s Core Values and Code of Conduct,” Sibel said in a statement.
The chair of the Millinocket Town Council, Steve Golieb, released a statement Tuesday denouncing the sign.
“It is deeply saddening, disgraceful and unacceptable for any person, business or organization to attempt to make light of Juneteenth and what it represents for millions of slaves and their living descendants,” Golieb wrote. “There is no place in the Town of Millinocket for such a blatant disregard of human decency.”
President Joe Biden and the state of Maine each signed bills into law in June 2021 recognizing Juneteenth as a federal and state holiday.

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CNBC’s Jim Cramer on Wednesday told investors that there are several things that need to happen for the market to have a “bull market within a bear market situation.”
“For the broader averages, I’m one of only a handful of people who genuinely believe we could have an entire bull market within a bear market situation, but only if we get some specific signposts,” the “Mad Money” host said.

CNBC’s Jim Cramer on Wednesday told investors that there are several things that need to happen for the market to have a “bull market within a bear market” situation.
“We’re going to have rolling bottoms just like we had rolling tops. As long as you know how to identify the signs, you’ll be able to spot them ahead of time and figure out how aggressive you should be and how much money you can possibly make,” the “Mad Money” host said.

“As for the broader averages, I’m one of only a handful of people who genuinely believe we could have an entire bull market within a bear market situation, but only if we get some specific signposts,” he added.
Stocks dipped slightly on Wednesday after gaining the day before, exhibiting the market’s volatility as investors grow more fearful of a possible recession.
Here is Cramer’s list of signposts that will indicate the market’s long-term recovery:

Oil prices need to stabilize at levels beneficial for producers and the public
Rampant food inflation needs to end
Unemployment rates might need to rise to 5% for a couple of quarters: “That would tamp down demand and give us some breathing room in the fight against inflation,” Cramer said.
Investors need to stop engaging in speculative trading
The advance-decline line needs to get better: “This is an all-important gauge that measures the overall breadth of the market — how many stocks are going up versus down. When you see it going steadily higher, that’s a solid precursor to a run,” he said.
Stronger, established firms need to merge with newer, “junk” firms

“You get all of these, you’ll see the bears on the run and interest rates will plummet. But without them, the market remains a house of pain,” Cramer said.

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Billionaire Michael Rubin is selling his ownership stake in the Philadelphia 76ers.
This is due to a conflict with Rubin’s growing sports e-commerce company, Fanatics, which is looking to expand into sports betting.
Fanatics is currently valued at $27 billion.

Michael Rubin attends Fanatics Super Bowl Party on February 12, 2022 in Culver City, California.
Shareif Ziyadat | Filmmagic | Getty Images

Billionaire Fanatics CEO Michael Rubin announced Wednesday that he is selling his 10% stake in the parent company that owns the Philadelphia 76ers and New Jersey Devils, citing a conflict of interest with Fanatics’ collectibles and planned sports betting operations.
Rubin has no plans to buy into a different team after he sells his stake in Harris Blitzer Sports & Entertainment, a person familiar with the matter told CNBC. His focus is instead on Fanatics, the sports e-commerce company that has grown into a global operation with a $27 billion valuation.

“When I was part of the ownership group that acquired the Sixers in 2011, Fanatics was just getting started with a small office in King of Prussia selling only licensed sports products online,” the Pennsylvania native said in a statement posted on Twitter. “Today, Fanatics has quickly transformed into a global digital sports platform across multiple businesses, with more than 10,000 employees in 57 countries and serving nearly 100 million sports fans worldwide.”
Fanatics’ growth has been partly fueled by its acquisitions in recent years of WinCraft, which makes sports-themed merchandise, and Topps, the trading card company it bought for $500 million.
The NFL, MLB, NBA, NHL, MLS and some players unions all have stakes in Fanatics, which has numerous licensing rights and deals with professional and college athletes.
Topps recently announced that it will be launching a new line of trading cards featuring college athletes this fall, a program that will include more than 150 schools and cut some of the players in on the profits.
“I had the amazing opportunity to be part of the ownership group buying the team I grew up idolizing,” Rubin said in his statement. “Attending games, getting to know our players and watching, up close, from the inside has been one of the most exhilarating and educational aspects of my life.”

Fanatics is a two-time CNBC Disruptor 50 company. Sign up for our weekly, original newsletter that goes beyond the annual Disruptor 50 list, offering a closer look at private companies like Fanatics that continue to innovate across every sector of the economy.

— CNBC’s Jessica Golden contributed to this article.

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Tech giants, governments, trustbusters, investors: all eyes are on the much-anticipated stockmarket listing of Arm. Despite the recent rout in tech stocks, SoftBank, the Japanese group that paid $32bn for the British chip designer in 2016, still plans to refloat its shares by next March. On May 30th Cristiano Amon, boss of Qualcomm, an American chipmaker, told the Financial Times he would like to create a consortium with rivals like Intel or Samsung, either to buy a controlling stake in Arm or to purchase it outright—as Nvidia, another American firm, tried to do in 2020 in an abortive $40bn deal. Some British politicians argue that Arm is so critical that the government should take a controlling “golden share”. On June 14th it was reported that, perhaps in response, SoftBank was considering a secondary listing in London alongside the primary one in New York. Look at Arm’s finances and the interest seems puzzling. Its sales rose by 35% last year to $2.7bn—not bad, but peanuts next to the giants of chip design. Its valuation, as implied by the Nvidia deal, has risen by a quarter in six years. In the same period Qualcomm’s market capitalisation is up by half and Nvidia’s has risen 13-fold, recent market carnage notwithstanding.There are two explanations of the mismatch between Arm’s size and the covetousness it elicits. The first is the ubiquity of its products. Spun out of the wreckage of Acorn Computers, a British maker of desktops, in 1990, Arm has grown to the point where nearly all big tech firms use its designs. Most modern phones contain at least one chip built atop its technology. That makes it a keystone in the $500bn chip industry. Arm’s second selling point is its potential. After years of trying, its designs are making inroads into lucrative markets such as personal computers and data centres. They could also power everything from cars to light bulbs as everyday object become computers. Start with the ubiquity. Unlike firms such as Intel, which sells chips that it both designs and manufactures, Arm trades only in intellectual property (ip). For a fee, anyone can license one of its off-the-shelf designs, tweak it if necessary, and sell the resulting chip. Besides licensing revenue, Arm takes a small royalty from every sale of a chip built with its technology. In 2021 licensing revenues accounted for a bit over $1bn, while royalties brought in $1.5bn.Removing the need to design a chip—a complicated, highly specialised job—has made Arm’s off-the-shelf designs popular, especially as chips have become more and more complicated. New Street Research, a firm of technology analysts, reckons Arm has a 99% share of the $25bn market for smartphone chips. Its products are widely used in everything from drones and washing machines to smart watches and cars. Arm says it has sold just under 2,000 licences since its founding (see chart). More than 225bn chips based on its designs have been shipped. It hopes to hit 1trn by 2035. The firm’s long customer list explains the backlash against Nvidia’s proposed buy-out. Simon Segars, who stepped down as Arm’s boss this year, used to describe the firm as the neutral “Switzerland of the tech industry”. Other chipmakers feared that giving a rival control of it would undermine this neutrality, explains Geoff Blaber of ccs Insight, a research firm. So did trustbusters in big markets, whose concerns derailed the deal. Few were reassured when Jensen Huang, Nvidia’s boss, insisted that he had no plans to use Arm to stymie rivals. That same roster of customers is also part of the explanation for the mismatch between Arm’s importance and its finances. Low prices were one reason why Arm’s technology triumphed over rival chip architectures. New Street reckons that Arm earns royalties of just $1.50 from the sale of a high-end smartphone, for which consumers fork out $1,000 or more. Cheaper gadgets might earn it a few cents. The firm has raised its royalty rates over time, notes Pierre Ferragu of New Street, often when a new version of its designs is released. According to one insider, SoftBank wanted to increase them further. But, he says, the plan caused friction with Arm’s bosses, who worried this would irk existing customers. It could also jeopardise Arm’s effort to conquer new markets. In 2020 Apple, which has long used Arm chips in iPhones, began replacing Intel silicon in its laptops and desktops with Arm’s designs. Although Apple is not as big in this business as it is in smartphones, it was a vote of confidence for Arm in what had been foreign territory. Arm has also increasingly been competing in the high-margin business of servers, the high-spec machines found in data centres. That market has for decades been dominated by Intel, but in recent years Arm has scored notable victories. Amazon Web Services, the e-commerce giant’s cloud division, now uses lots of Arm-derived “Graviton” chips. Ampere, an American firm that sells data-centre chips, also bases its products on Arm’s designs, as do several makers of specialised processors for tasks such as managing networks. TrendForce, another research firm, predicts that Arm processors could account for 22% of installed server chips by 2025. Under SoftBank’s ownership Arm has put lots of money into research and development, says Mr Blaber. That will help it maintain its technological edge. It is nevertheless limited in how much it can charge for its products by the emergence of a new challenger: risc-v. This is a novel chip architecture that lacks royalties and licence fees. In 2020 Renesas, an Arm licensee, announced it would use risc-v for a new generation of products. Intel, Qualcomm and Samsung, among others, are also eyeing the technology. Whatever Arm’s fate, then—as a public company, a state-controlled one or the ward of a consortium of chip-industry heavyweights—its future will therefore probably resemble its past: vital but, by Silicon Valley standards, a minnow. ■ More