Hyzon Motors is the latest electrification startup to crash after going public through a special purpose acquisition company. The maker of hydrogen fuel cell systems for heavy-duty trucks pulled its forward financial guidance, sending its shares down 38%.
Whale of a tale
Hyzon denied those allegations. But the SEC in January subpoenaed documents and information about the Blue Orca report.
In its SEC filing late Thursday, Hyzon said company management “has become aware of revenue recognition timing issues in China.” A board-appointed special committee and external advisers are investigating.
Hyzon’s board reassesses strategy
The Hyzon board of directors has retained a third-party consulting firm to assist the board and management with reassessing Hyzon’s global strategy and operations.
“The delay in filing will have no immediate effect on the listing or trading of the company’s common stock, although there can be no assurances that further delays in the filing of the Form 10-Q will not have an impact on the listing or trading of the company’s common stock,” the statement said.
Hyzon Motors CEO Craig Knight (Photo: Alan / )
Hyzon’s European issues
Hyzon also said it “has identified operational inefficiencies at Hyzon Motors Europe B.V., the company’s European joint venture with Holthausen Clean Technology Investments B.V. The company’s plan to purchase 25% of the shares in the joint venture — giving it 75% ownership — has been unsuccessful. Hyzon said the deal may not go through.
The selloff continued Monday. Hyzon closed down 11.87% to set an all-time low of $2.45.
Analysts who follow the company downgraded their estimates.
J.P. Morgan analyst William Peterson double downgraded the stock to underweight from overweight. He withdrew his $6-a-share stock price target.
Peterson wrote in a research note that given the disclosures, “investors are unlikely to give credit to the company for having strong core fuel-cell technology and an underrated hydrogen strategy, at least for the next several quarters.”
Wedbush Securities analyst Dan Ives downgraded Hyzon to neutral from outperform, cutting his stock price target to $3 from $7.
“There are more questions than answers at the moment with the myriad of issues identified in the filing that we fear could slow down the growth story of Hyzon (that was actually progressing well the last six months) with this black cloud now over the story,” Ives wrote.
D.A. Davidson analyst Michael Shlisky dropped his rating to neutral from buy and his price target to $4 from $12.
“We simply do not know where things will go at this point, and these types of investigations and restructuring actions can be expensive and distracting,” Shlisky wrote. “We are moving to the sidelines until we have more clarity on these matters.”
