Scioto County Residents Concerned: Experts Have Doubts About PureCycle
Local officials were excited about the prospect of an innovative plastic recycling company expanding their facility at the business park in Haverhill. In fact, the Southern Ohio Port Authority was so keen on the prospect, the agency handled the issuing of $300 million in bonds to fund the project.
Last June, Scioto County Commissioner Bryan Davis was enthusiastic about the project and the involvement of the Southern Ohio Port Authority. “This has grown exponentially since the Southern Ohio Port Authority got involved with it.” Back then, Davis hinted at bigger things to come. “They are working on other technology. They brought on a lot of partners and are getting ready to announce a major partner.”
PureCycle says it has an innovative way to recycle polypropylene. Only about 1% of the 170 billion pounds of polypropylene used each year is recycled.
According to the company, the process removes contaminants, color, and odor that traditional recycling methods cannot. Back in April, the company was added to the Nasdaq Stock Exchange.
However, according to the financial experts at Hindenburg Research, the company has no research to back up its claims about this innovative technology.
Hindenburg specializes in exposing:
- Accounting irregularities
- Bad actors in management or key service provider roles
- Undisclosed related-party transactions
- Illegal/unethical business or financial reporting practices
- Undisclosed regulatory, product, or financial issues
In a recent report, they called PureCycle a “charade sponsored by the worst of Wall Street.”
The researchers pointed out that PureCycle has yet to earn a dime in revenue. Further, the company’s chairman/CEO and executives took 6 companies public before PureCycle. All of the companies failed and close to $800 million in investors’ money was lost. Hindenburg says executives from PureCycle have already taken $7 million in cash bonuses despite the company earning no money.
Lack of Research
The researchers also point out that most leaders in the recycling industry publish research to back their claims. That research is then looked over by other experts in the field to confirm it. This has yet to happen with PureCycle. They also feel PureCycle has exaggerated its potential profit.
According to Hindenburg, “PureCycle represents the worst qualities of the SPAC boom; another quintessential example of how executives and SPAC sponsors enrich themselves while hoisting unproven technology and ridiculous financial projections onto the public markets, leaving retail investors to face the ultimate consequences.”
While the Southern Ohio Port Authority issued the bonds, the agency is not responsible for the debt and neither is the county. The sole responsibility for the debt belongs to PureCycle and those who’ve invested in the company.
While Scioto County wouldn’t owe any money if PureCycle fails, it would be a tremendous blow to officials’ plan for the economic future.