Shares in Loop Industries of Canada fell 33 per cent on Tuesday after short-seller Hindenburg Research 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 assertion, Loop mentioned Hindenburg’s claims have been “unfounded, incorrect or based on the first iteration of Loop’s technology”.
Loop, which has by no means generated income, has introduced partnerships to supply recycled plastic to firms akin to Coca-Cola, Danone and L’Occitane however has not delivered on its guarantees, the report states.
Coca-Cola informed the Financial Times it has not but acquired any recycled plastic from Loop. The different firms didn’t reply to requests for remark.
Loop has mentioned it had developed a “revolutionary” course of to recycle plastic from sources that may sometimes be thought of rubbish — together with “plastic bottles and packaging, carpets and polyester textiles of any colour, transparency or condition and even ocean plastics that have been degraded by the sun and salt”.
Hindenburg, which makes cash by betting that share costs will fall, mentioned Loop’s claims have been “technically and industrially impossible”.
Hindenburg mentioned the corporate operated two separate analysis labs. One was led by two brothers who produced “incredible results” regardless of having “no apparent postgraduate studies in chemistry or polymers or any work experience other than Loop”. The different lab, staffed with “rank-and-file” scientists, couldn’t replicate their findings, it claimed.
“We found a combination of technology that could [work], but it was too expensive to be viable,” one former Loop worker informed the FT. “When you work at the lab scale you can get good results, but going up to the industry scale, you face trouble you never see at the lab.”