Standard Lithium shares hit by short seller’s technology allegations

Feb 3 (Reuters) – Shorter seller Hindenburg Investigate alleged on Thursday that Standard Lithium Inc’s strategy to produce lithium for electric car or truck batteries in Arkansas is centered on technological innovation that does not do the job, sending Standard’s shares down 27{4a5bba0ff4e6e71c77a43f702bcf67aaa905f098cd98a7212a705248916f19b8} and erasing $305.7 million from the firm’s market price.

Hindenburg, which did not disclose the dimension of its brief placement, alleged that Standard’s technologies is “having difficulties out of the gate” and centered on patents that were turned down by U.S. officers.

Vancouver-centered Common pushed back from the allegations, noting that it has been running a pilot facility in Arkansas to take a look at its technological innovation for extra than 20 months and specified normal general public updates.

Normal additional in a assertion that it is “self-assured in its lithium extraction technology” and that all of its patent purposes are “lively and go on to be prosecuted in the ordinary training course.”

Koch Industries Inc, which invested $100 million in Regular previous tumble and is its premier shareholder, also defended the firm’s technological innovation.

Quick sellers provide borrowed shares in the hope of purchasing them again at a much less expensive value and pocketing the change. Approximately 2.6{4a5bba0ff4e6e71c77a43f702bcf67aaa905f098cd98a7212a705248916f19b8} of Standard’s 154.4 million superb shares are staying utilized to small as of Thursday, in accordance to Refinitiv details.

Quick seller Blue Orca printed a report related to Hindenburg’s previous November casting uncertainties on Standard’s technology, allegations that the corporation denied at the time.

Conventional is portion of a rising wave of companies attempting to use direct lithium extraction (DLE) systems to make the white steel at industrial scale. The technologies vary by corporation, but share the goal of using less land and groundwater than really hard rock mining and evaporation ponds, the conventional techniques to procedure lithium.

Common has said its proprietary DLE engineering works by using an adsorption system to filter lithium from brine, which it sources from a Lanxess (LXSG.DE)bromine facility in Arkansas. The enterprise has not produced or offered commercial quantities of lithium.

Correctly, Normal promises to extract lithium from wastewater in a way that would have incredibly very little environmental footprint, a tantalizing prospect for traders and automakers.

Lanxess, while, believes Normal has yet to demonstrate the project’s “evidence of concept,” Hindenburg explained, citing unnamed Lanxess officers.

Lanxess declined to remark.

Hindenburg extra that it thought Koch “missed red flags and unsuccessful in its because of diligence in its haste to deploy money.”

Koch spokesperson Christin Fernandez disagreed, saying the firm “conducted considerable owing diligence and discovered Conventional Lithium’s technologies a promising bright place on the path towards lithium production listed here in the U.S.”

Hindenburg also alleged that Typical is element of a long-jogging inventory promotion scheme by Chief Government Officer Robert Mintak. Mintak declined to remark when reached by cellphone on Thursday.

Regular defended Mintak in its push launch, saying he “has created a big and dynamic team with a wide and various talent set.”

Hindenburg’s report promises that Common has only put in C$1.7 million ($1.3 million) on exploration and growth. Common disputed that figure, noting it has used about C$29.4 million to open up the Arkansas pilot plant and yet another C$6.9 million to run it.

New York-centered Hindenburg has in the earlier qualified Nikola Corp (NKLA.O), Lordstown Motors (Ride.O) and other firms included in the booming EV industry.

($1 = 1.2677 Canadian bucks)

Reporting by Ernest Scheyder Editing by Bernard Orr

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