Loop released an independent review of its process on Monday that Hindenburg said indirectly confirms the ineffectiveness of its so-called pure PET plastics made from “100% recycled content.”
Although the review was meant to highlight the effectiveness of Loop’s technology, a disclaimer at the end of the filing states the verification was not intended to validate the yields, or economic viability of the process. That, Hindenburg said, shows its analysis was largely meaningless.
“Information on purity without cost and yield is incomplete to the point of being irrelevant,” the report said. Hindenburg said a former Loop employee substantiated that claim, by saying the review means nothing if quantitative aspects of the process are absent.
The short-seller called out Loop for using the word “pure” too often in its review. In Loop’s second-quarter SEC filing, the company claims its recycling process has “consistently high monomer yields, excellent purity, and improved conversion costs.”
Hindenburg noted another veteran chemistry specialist saying that Loop’s independent review was “non-technical marketing material” and “very misleading.” He concluded that it is wrong to declare Loop’s process as efficient and cost-effective based on the information provided in its review.