It’s been a tough trading week across the electric vehicle sector. Popular newcomer Lucid Motors (NASDAQ:LCID) is experiencing extreme volatility during its highly anticipated production week and Lordstown Motors (NASDAQ:RIDE) is finally seeing some growth today thanks to the announcement of an impending deal. One of their competitors is also finally beginning to rebound after a difficult few days. EV producer Hyzon Motors (NASDAQ:HYZN) recently fell victim to short-selling. Only today have shares of HYZN stock begun to turn around.
What Happened with HYZN Stock
“The company is on the losing side of a scathing short-seller report on HYZN stock,” reported InvestorPlace’s Brenden Rearick yesterday.
The report to which he was referring was released by Blue Orca Capital earlier this week. It made allegations that Hyzon was presenting investors with misleading information regarding the EVs it was producing. It wasn’t long before this report sent HYZN stock into a nose drive, with shares plunging by 28% on Sept. 28 and declining by another 9.05% on the following day.
This morning saw this trend reverse as the stock gradually began climbing throughout the afternoon. HYZN stock closed out Thursday up by more than 15%. While its declines for the week are painful, today’s rebound is still impressive, given how far the stock had fallen previously.
Why It Matters
Hyzon issued a response to the report upon its release. Short and to the point it summarized that “While the Company disagrees with the conclusions of the report, which it believes are based on a number of factual inaccuracies, it is reviewing the report carefully and intends to respond further in due course.”
As it stands, the company’s damage control methods imply that it considers itself to be the victim of a false report. As can be expected, HYZN’s story quickly caught the attention of popular investment forum r/WallStreetBets, which flagged it as “perfect target for a short squeeze.” Users quickly responded that the report seemed to be based on false information with little to support its claims.
What’s Next for HYZN Stock
It is easy for this type of short-selling pressure to drive down a stock, but unless the claims behind it are backed up by concrete evidence, it’s likely that the stock will rebound fairly quickly. The way it looks from here, that’s exactly what we’re seeing today from HYZN stock.
Blue Orca also criticized Lordstown in the report, using it as point of comparison for why Hyzon should be shorted. Ironically, both stocks have risen today, though for unrelated reasons.
HYZN stock is worth watching.
On the date of publication, Samuel O’Brient 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.