Hyzon Harpoons Blue Orca, Pepsi Pops & Lordstown Flops

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Keep Calm & Hyzon …

Great Ones, the day has come. Hyzon Motors (Nasdaq: HYZN) finally responded to Blue Orca Capital’s short-selling report … and it’s a doozy.

Last week, I told you that if I could find enough publicly available information to discredit Blue Orca that Hyzon Motors would have a field day with the report. And I was dead on…

From start to finish, Hyzon Motors’ response slams Blue Orca Capital for being so obsessed with generating profits that it didn’t even bother to read the company’s SEC filings, its quarterly reports or even check the transcripts of Hyzon investor earnings calls:

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The self-serving short seller report published by Blue Orca last week is inaccurate and misleading, and we believe it was intended solely to generate profits on Blue Orca’s short position at the expense of Hyzon’s long-term shareholders.

Hyzon is enjoying market momentum across its business globally and is focused on executing on the business plan it presented to investors. 

Hyzon has no record of this short seller ever meeting with Hyzon management, requesting any information or clarification from Hyzon, or otherwise seeking to verify any of its claims, which would have been expected given the inflammatory and grossly inaccurate statements made in the report. 

We stand by our public disclosures, and we expect Hyzon’s performance will speak for itself. Today, Hyzon operates from a position of strength with approximately $500 million of cash and cash-equivalents on its balance sheet to execute on our strategy, and we look forward to discussing a number of promising developments with our investors in our regularly scheduled earnings calls. — Craig Knight, Hyzon Motors CEO

Hyzon’s rebuttal directly addresses every concern raised by Blue Orca Captial. Here are some of the highlights:

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1. Shanghai Hydrogen HongYun Automotive was created specifically by the Shanghai government to participate in China’s national hydrogen fuel cell pilot program. Hence its “newness.”

Shanghai HongYun also isn’t a customer but has signed a Memorandum of Understanding, and Hyzon expects binding purchase orders for 100 trucks in 2021 and 400 trucks in 2022.

2. Hiringa Energy isn’t an end user of hydrogen trucks, and if you reread Hyzon’s announcement about the deal, you’d know that.

Hiringa is helping Hyzon facilitate hydrogen fuel cell deals in New Zealand, including an order for 20 trucks to be delivered to TR Group Ltd. If Blue Orca had read the public filings on the deal, it would have known that.

3. Hyzon notes that Horizon Fuel Cell Technologies is its largest shareholder, not Jiangsu Horizon as Blue Orca claimed. Jiangsu is a Horizon subsidiary and assists Hyzon Motors in fuel cell manufacturing until its own factories come online.

Hyzon also said that Jiangsu shipped more than 26 megawatts of fuel cells in 2019 and more than 36 megawatts in 2020 — in stark contrast to Blue Orca’s claims.

4. Hyzon Motors also reiterated that Ian Thompson was never an employee, only serving as interim Chief Technology Officer (CTO) via a consulting partnership with Horizon. Oh, and Gary Robb, Hyzon co-founder and former CTO, did, in fact, retire. Another point that Blue Orca could have easily verified.

If you’d like to read the full response, click here.

Basically, the TL;DR version of Hyzon Motors’ response goes like this: All you had to do was read, and you couldn’t even do that.

But then, Blue Orca Capital’s motive wasn’t to get a better understanding of Hyzon Motors’ business or to out a charlatan in the alternative energy market. It was to make money. And given how easy it was to debunk Blue Orca’s claims, I think that’s readily apparent now.

HYZN stock surged more than 14% following the company’s official statement, and I think we can expect more gains from here. Hang in there Great Stuff Picks readers — HYZN is about to take off.

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This’ll Put Some PEP In Your Step

Snack and beverage giant PepsiCo (Nasdaq: PEP) gave investors something to munch on this morning after the company beat earnings estimates by $0.06 per share and posted total quarterly earnings of $1.79 per share.

Pepsi said the reopening of public venues like movie theaters and restaurants helped boost sales in the latest quarter, with revenue climbing 11.6% to $20.19 billion. Or maybe it was just all the hype surrounding the forthcoming lineup of HARD MTN DEW alcoholic beverages … which sound like death to me, but you DEW you.

Either way, shares of the sleepy soft drink company climbed about 1% on the news, which is noteworthy for an arthritic, 128-year-old large cap. (When 128 years old you reach, move as quick you will not, hmmm?)

Pepsi also raised its full-year guidance and now expects organic revenue to grow 8%, up from its prior forecast of 6% growth. I guess sometimes slow and steady really does win the race.

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Facebook Follies

I know it’s spooky season and all, but even I wasn’t prepared for the psychological thriller that’s come from watching Facebook’s (Nasdaq: FB) saga play out in real time.

On top of Facebook’s whistleblower coming forward for a 60 Minutes interview this weekend, the social media company faced a global outage of its accounts and messaging services — including Facebook, Messenger, WhatsApp and Instagram.

Facebook blamed the six-hour “dark period” on a faulty configuration transmitter that interrupted the flow of network traffic to its many data centers.

Not only did this disrupt small businesses that rely on Facebook’s platforms, but also the social media monolith itself: According to ad measurement firm Standard Media Index, Facebook lost about $545,000 in U.S. ad revenue every hour during the outage.

I’m not saying Facebook’s latest fumble was a good thing … but I do get a certain sense of satisfaction whenever Zuckerberg finds himself in hot water. And man, that pot is starting to boil.

All You Need Is LUV … And A COVID Shot

Southwest (NYSE: LUV) is the latest airline to mandate COVID-19 shots for its 56,000-person workforce following the Biden administration’s requirement that all companies with federal contracts need their workers to get vaccinated.

Now, I know this is a sore topic for some of you Great Ones — you know who you are — but let’s keep today’s discussion focused on LUV stock, shall we? While shares sank half a percent following Southwest’s announcement, I don’t see this having any long-term ill effects on the company’s share price.

In fact, just yesterday, Barclays upgraded LUV stock to overweight from equal weight, citing “bluer skies ahead” for low-cost, low-fare airlines like Southwest.

I mean, let’s face it: People are still traveling despite COVID-19. And so long as people are traveling, they’ll keep trying to save money by flying budget airlines. The defense rests.

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Lord of the Why Even Tries

It’s been a rough and bumpy road for Lordstown (Nasdaq: RIDE) lately — and things aren’t getting any better for the electric pickup truck maker despite its recent Foxconn acquisition rumor.

Yesterday evening, Morgan Stanley analyst Adam Jonas downgraded RIDE stock from hold to sell while simultaneously cutting his price target from $8 to just $2 per share.

Normally, a single analyst downgrade isn’t enough to pique my interest. But you have to remember that Lordstown only owns one EV plant in Ohio … and that’s the same plant it’s trying to entice Foxconn to buy so it has enough cash to make EV trucks.

And according to Jonas, Foxconn’s $230 million cash payment proposal is less than 20% of the plant’s actual value. So … either the joke’s on Foxconn, or Lordstown may soon find itself without a serious investor.

That’s the kind of news Wall Street hates, and investors acted accordingly: RIDE shares are now down 10% today. But I have a feeling this isn’t the last of Lordstown’s unlucky plight.

Tell me what’s on your mind this week: GreatStuffToday@BanyanHill.com. We’d love to hear from you! In the meantime, here’s where else you can find us:

Until next time, stay Great!

Joseph Hargett

Editor, Great Stuff

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