Recycled Plastic Maker Loop Denies Shortseller Accusations
By Dieter Holger
Loop Industries Inc. has denied accusations from shortseller
Hindenburg Research of lying about its recyclable plastic
technology, but it declined to specifically address a raft of other
allegations about unproductive partnerships and the hiring of a
convict by its chief executive.
Hindenburg--which holds a short position in Loop and said its
report is based on photos, internal documents and interviews with
former employees--said Tuesday that Loop's scientists were
encouraged to lie about the technology and that other employees
were unable to independently reproduce breakthroughs made in a
The firm also accused Loop CEO Daniel Solomita of hiring a
convict, who had previously pled guilty to stock manipulation, to
help raise money for the company. Additionally, Hindenburg
suggested that Loop's partnerships with Danone SA, Coca-Cola Co.,
PepsiCo Inc. and chemical company Indorama Ventures PCL haven't
resulted in any plastic being produced.
"We expect Loop will never generate any meaningful revenue,"
Hindenburg said, adding that it has submitted its findings to
Terrebonne, Canada-based Loop said Tuesday that Hindenburg's
claims were either unfounded, incorrect or that allegations about
its so-called "infinitely recyclable" polyethylene terephthalate
plastic, commonly known as PET, were "based on the first iteration
of Loop's technology, known as Gen 1, which was in use between 2014
"In 2017, Loop reinvented its process and developed its Gen 2
technology, which is at the core of Loop's commercialization
projects," the company said.
A Loop spokeswoman on Wednesday declined to comment directly on
the other accusations in the report.
In September, Loop penned a deal with French waste manager Suez
SA to build a factory in a yet-to-be announced location in Europe.
The companies said they would decide the factory's location in
When asked for comment on whether it had conducted due diligence
on Loop's technology, a Suez spokeswoman on Wednesday pointed to
Loop's Tuesday statement, which had no mention of the factory
Shares in Loop have traded down more than 30% following the
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(END) Dow Jones Newswires
October 14, 2020 09:52 ET (13:52 GMT)
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