Nikola Tesla. When you hear the name, what’s the first thing that comes to mind? A decade ago, nearly everyone who heard the name would associate it with the 20th-century inventor of alternating current. Today, however, both "Nikola" and "Tesla" are brand names behind a constantly developing range of electrically powered vehicles.

Tesla, the more famous of the two, is the world’s most valuable car company, worth more than all others combined. Nikola, the much smaller of the two, has yet to sell anything yet and presides over a market cap of over $12 billion – down from over $30 billion in the last three months. It has gone down over $7 billion in the last week alone, following recent fraud allegations that imply the entire company is a ruse.

So is it really a fake? What is really going on at Nikola?

Nikola was listed on June 4 of this year on the NASDAQ exchange – through a reverse merger that was taking advantage of the run-up in Tesla stock.

That it, too, is named after the Serbian American inventor is no coincidence, with the founder Trevor Milton trademarking the name after presumably being inspired by the use of it by Tesla.

As for the fraud allegations, Nikola said it would produce zero-emission semitrucks using hydrogen fuel cells. Right now, the company has only produced concept cars, however, and has yet to manufacture any model.

That’s all. It is essentially a research and development (R&D) firm with a vision for producing semitrucks, as stated in a recent partnership signed with General Motors (GM). GM would like to produce the designs and provide other parts for Nikola in exchange for an 11% share of the company.

The fraud allegations themselves stem from a Hindenburg Research report that accused the company of not having any of the technology it claims to possess, staging promotional films of their trucks coasting down a hill, among other damning allegations.

Hindenburg Research does, however, have a vested interest in driving the share price of Nikola down, as it has a large short position in the stock. In other words, the lower the price of Nikola, the cheaper it will be for Hindenburg Research to buy back shares it already sold in anticipation of a drop.

That the report was launched after the GM announcement that catapulted stock may also be no coincidence. Two opposing sides of an equity position, jostling for a foothold is hardly anything new. The degree to which these two firms have gone to war, however, may be unprecedented in recent memory.

For its part, the U.S. Securities and Exchange Commission (SEC) and Department of Justice (DOJ) have announced they would be looking into these allegations.

Not known for their speed, the SEC and DOJ will take at least a few weeks before they announce anything, if not months.

In the interim, investors are left wondering whether a short-seller is making up allegations to profit from a crash or if a company has executed an "intricate fraud" to fool investors. Time will tell.