Shares in Loop Industries of Canada fell 33 per cent on Tuesday after short-seller Hindenburg Analysis alleged the corporate’s declare to own revolutionary recycling know-how is a “fiction”.
After publication of the new Hindenburg report, Nasdaq-listed Loop shares fell to $7.83 on Tuesday after closing at $11.61 a share on Monday.
In a statement, Loop stated Hindenburg’s claims had been “unfounded, incorrect or primarily based on the primary iteration of Loop’s know-how”.
Loop, which has by no means generated income, has introduced partnerships to supply recycled plastic to corporations resembling Coca-Cola, Danone and L’Occitane however has not delivered on its guarantees, the report states.
Coca-Cola instructed the Monetary Occasions it has not but obtained any recycled plastic from Loop. The opposite corporations didn’t reply to requests for remark.
Loop has stated it had developed a “revolutionary” course of to recycle plastic from sources that will sometimes be thought of rubbish — together with “plastic bottles and packaging, carpets and polyester textiles of any color, transparency or situation and even ocean plastics which have been degraded by the solar and salt”.
Hindenburg, which makes cash by betting that share costs will fall, stated Loop’s claims had been “technically and industrially not possible”.
Hindenburg stated the corporate operated two separate analysis labs. One was led by two brothers who produced “unimaginable outcomes” regardless of having “no obvious postgraduate research in chemistry or polymers or any work expertise aside from Loop”. The opposite lab, staffed with “rank-and-file” scientists, couldn’t replicate their findings, it claimed.
“We discovered a mixture of know-how that might [work], nevertheless it was too costly to be viable,” one former Loop worker instructed the FT. “Once you work on the lab scale you will get good outcomes, however going as much as the trade scale, you face hassle you by no means see on the lab.”
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