PureCycle (NASDAQ:PCT) stock is taking a beating on Thursday following a brutal short report taking the plastics recycling to task.
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Let’s take a dive into that repot below and why it’s hammering PCT stock so hard today.
- To start off with, the short report .
- In the report, it claims that PureCycle is another case of a special purpose acquisition company (SPAC) gone wrong.
- It points to the company’s lack of revenue, yet multi-million-dollar bonuses for executives.
- In addition to this, Hindenburg Research reached out to previous employees of other companies taken public by the same team.
- These employees said that financial projections are “wild ass guessing”, and that companies were brought public to early and deceived investors.
- Backing up this idea is the fact that PureCycle’s chairman and CEO has taken six companies public prior to this one.
- None were successful with two going bankrupt, three delistings, and one being acquired after 95% drop.
- The short report also highlights that the company only has two ratings, both of which are buy.
- The problem is that these ratings come from Roth Capital and Craig Hallum Capital.
- Both of these investment banks helped bring the company public and received 2 million founder shares for less than a penny each.
- Since PureCycle went public via a SPAC and not an IPO, there’s no quiet time that requires these investment banks to not rate PCT stock.
- It’s also worth noting that PureCycle hasn’t published any peer-reviewed studies detailing its advancements in the plastics recycling field.
- That’s important as other companies in the field do typically do this.
- Adding to that are claims that the company’s flammable pressurized process was called a “bomb” by Hindenburg Research’s expert on the matter.
PCT stock was down 30.8% as of Thursday morning.
PureCycle isn’t the only SPAC making headlines lately.
Several others are in the news as well. That includes Social Capital Hedosophia Holdings Corp. (NYSE:IPOE), Stem Inc.
(NYSE:STEM), and Social Capital Hedosophia Holdings VI (NYSE:IPOF). Investors can learn more about these at the links below.
More SPAC News
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- Star Peak Energy Illustrates the Woes SPACs Face
- IPOF Stock: What to Know ¶¶Òõ×îаæ the New Equinox SPAC Merger Rumors
On the date of publication, William White did not have (either directly or indirectly) any positions in the securities mentioned in this article.
