Shares of New York-based hydrogen truck maker Hyzon Motors have suffered a massive drop since last Friday after the company disclosed a mass of irregularities that led analysts to downgrade the company’s shares.
Hyzon Motors, which has developed a handful of hydrogen fuel cell utility vehicles, announced last week that it would not be able to file its second quarter financial results by the August 15 deadline due to a series of problems within the company.
According to Hyzon’s statement, the company “has become aware of revenue recognition timing issues in China” as well as “operational inefficiencies at Hyzon Motors Europe BV, the company’s European joint venture with Holthausen.”
Just over a year after the company began trading on the Nasdaq stock exchange with an initial market value of $2.7 billion, the company has now had to appoint a committee of board members and lawyers and independent advisers to assess the irregularities in his China. operations.
In the wake of the news, shares of Hyzon fell 45% and prompted analysts to downgrade the company’s stock rating.
The news prompted JP Morgan analyst William Peterson to double downgrade the company’s stock from overweight to underweight and withdraw its share price target, down $6. Wedbush Securities’ Dan Ives also downgraded Hyzon from outperform to neutral and cut his share price target to $3 from $7.
“There are more questions than answers at this time with the myriad of issues identified in the filing that we fear will slow Hyzon’s growth story (which has been progressing well over the past six months) with this dark cloud now over history,” Ives said.
“In a risky market and with concerns about many electric vehicle names, the last thing investors wanted to see was this news and so we are moving away from the name until we have a better understanding of the issues. to solve.”
DA Davidson’s Michael Shlisky also reduced his buy rating to neutral and explained that the eventual outcome of the irregularities could be nothing more than minor reformulation and improved European operation, or it could lead to changes a lot. more drastic.
“We just don’t know where things will go at this point, and these types of investigations and restructuring actions can be costly and distracting,” Shilsky wrote. “We are moving to the sidelines until we have more clarity on these issues.”
Among the fears is the delisting of Hyzon Motors from the Nasdaq.
In a filing with the SEC last week, Hyzon explained that “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 assurance that further delays will occur. .. will have no impact on the listing or trading of the ordinary shares of the Company.
Considering that Hyzon has already delivered its commercial hydrogen trucks and buses and accumulated a large number of purchase contracts, the company’s current financial turmoil could nevertheless significantly undermine any future growth or success.
Joshua S. Hill is a Melbourne-based journalist who has written about climate change, clean technology and electric vehicles for over 15 years. He has been reporting on electric vehicles and clean technologies for Renew Economy and The Driven since 2012. His preferred mode of transport is his feet.