Loop Industries, Inc. (LOOP) Accused of Deceiving Consumers and Investors
During the class period, the company falsely touted the strength of Loop’s technological and operational profile. On October 13, 2020, Hidenburg Research published a report titled “Loop Industries: Former Employees and Plastics Experts Blow The Whistle On This ‘Recycled’ Smoke And Mirrors Show”. According to the report, Loop Industries’ scientists were under pressure from CEO Daniel Solomita to lie about the results of the company’s process. Hidenburg also alleged that the Company did not have the proprietary process or technology to break PET down to its base chemicals at a recovery rate of 100% and that it would have been ‘technically and industrially impossible’ to do so. The report purported that a key partner Tysenkrupp put an indefinite hold on their global alliance agreement as Loop ‘underestimated’ both costs and complexities of its process. On this news, Loop’s stock dropped 32% to close at $7.83 and has yet to recover.