- Loop Industries’ shares fell 22% on Tuesday after Hindenburg Research alleged the corporate’s plastic-recycling technology is very deceptive.
- The short-seller blasted Loop’s impartial evaluation for utilizing the phrase “pure” loosely and for not offering any particulars on the financial viability of its technological course of.
- “Information on purity without cost and yield is incomplete to the point of being irrelevant,” Hindenburg mentioned.
- A chemistry specialist concluded that it might be improper to declare Loop’s course of as environment friendly and cost-effective based mostly on the data offered in its evaluation.
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Loop launched an independent review of its course of on Monday that Hindenburg mentioned not directly confirms the ineffectiveness of its so-called pure PET plastics made out of “100% recycled content.”
Although the evaluation was meant to spotlight the effectiveness of Loop’s technology, a disclaimer on the finish of the submitting states the verification was not meant to validate the yields, or financial viability of the method. That, Hindenburg mentioned, reveals its evaluation was largely meaningless.
“Information on purity without cost and yield is incomplete to the point of being irrelevant,” the report mentioned. Hindenburg mentioned a former Loop worker substantiated that declare, by saying the evaluation means nothing if quantitative elements of the method are absent.
The short-seller referred to as out Loop for utilizing the phrase “pure” too usually in its evaluation. In Loop’s second-quarter SEC filing, the corporate claims its recycling course of has “consistently high monomer yields, excellent purity, and improved conversion costs.”
Hindenburg famous one other veteran chemistry specialist saying that Loop’s impartial evaluation was “non-technical marketing material” and “very misleading.” He concluded that it’s improper to declare Loop’s course of as environment friendly and cost-effective based mostly on the data offered in its evaluation.
Hindenburg published a report in October that said Loop’s “revolutionary” technology inflates its actual capabilities. That despatched the corporate’s shares decrease by 39% on the time. The short-seller has additionally referred to as out EV-makers Nikola and Chinese automaker Kandi for deceptive buyers.
Loop Industries instructed Business Insider it stands by its technology, which was rendered efficient by impartial company Kemitek.
“These results are consistent with previous trials and testing evaluations of our technology,” a firm spokesperson mentioned in an e-mail. “We look forward to moving ahead with our plans to bring our technology to commercial scale with our partners.”
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