Today is proving to be a busy day in the electric vehicle sector, both for better and for worse. While Lucid Motors (NASDAQ:LCID) is stealing most of the spotlight with its big delivery announcement, Hyzon Motors (NASDAQ:HYZN) is wallowing for a second straight day. The losses today are a continuation of a bad week for the company. That’s because the company is on the losing side of a scathing short-seller report on HYZN stock.
Rochester-based Hyzon Motors is one of the newest players in the EV space with only a year to its name. The company doesn’t look to duke it out with the likes of Lucid or Tesla (NASDAQ:TSLA); rather, it is looking to carve out a niche in the commercial vehicle space — electrifying its own fleet of buses, semi trucks, and coaches. It also employs a fuel cell-based technology in its vehicles, looking to harness hydrogen as the next major era for fuel-efficient vehicles.
HYZN Stock Tumbles for Second Day After Short Seller Report
Yesterday saw the start to some massive losses for HYZN stock after Blue Orca Capital released a scathing report on Hyzon Motors. The 20-page document concludes with the firm’s announcement that it is taking a large short position in HYZN stock.
The document takes on a number of discrepancies in Hyzon’s reporting and accuses the company of misrepresenting facts about its business. Notably, the firm levies accusations against Hyzon that its largest customer, a Chinese company called Shanghai HongYun, is a fraudulent shell company. It alleges that Hyzon manufactured the deal in order to pump share prices.
Through its second-largest customer, Blue Orca makes the claim that Hyzon is misrepresenting sales information. New Zealand company Hiringa, who Hyzon claims ordered 1,500 vehicles, denies that it is taking an deliveries. If this is true, that means at least 24% of the company’s promised 2021 deliveries are fraudulent.
The firm closes out its report by mentioning the high executive turnover at Hyzon; it reminds investors that the company has seen three different CTOs in its less than two years of existence.
Of course, Hyzon is responding to the report. A press release from the company says Blue Orca is relying on “factual inaccuracies” to make its case against HYZN stock.
The fallout from the report is enough to keep HYZN stock on the downturn today, with shares down more than 5%. Nearly 6 million shares are trading hands today, against a daily average of 2 million.
On the date of publication, Brenden Rearick did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.