Short seller Hindenburg says Loop Industries' recycling technology is 'fiction'

Short seller Hindenburg Research published a report that calls out plastics recycling company Loop Industries’ stated breakthrough technology. Yahoo Finance’s Alexis Christoforous, Brian Sozzi, and Ines Ferre break down the details.

Video Transcript

- Loop Industries, as you just mentioned, being targeted by Hindenburg Research. This is the same short seller that went after Nikola. Loop-- according to Hindenburg, Loop is smoke and mirrors with no viable technology. That's what the report basically says, calling the company's recycling technology fiction.

Now, just to take a step back, Loop Industries is a six-year-old recycling company. It's based out of Montreal. The company has agreements with some big food and beverage companies like Coca-Cola, PepsiCo, Evian, and L'Oreal. The Hindenburg report basically bases its allegations on former Loop employees, also on plastic experts, on competitors, and also some of the company's partners.

And Hindenburg alleges that the company's technology is no more efficient or cost-effective than traditional recycling methods, also saying that Loop misrepresented its technology to investors, and accuses Loop's CEO of having employees lie about the company's technology. Hindenburg, of course, is shorting its position on Loop. And Yahoo Finance has reached out to Loop for a statement. So far, we have not received any statement. It's still early. This report came out today. Brian.