Block & Leviton LLP has filed a class action lawsuit on behalf of shareholders against PureCycle Technologies, Inc. (NASDAQ: PCT) and certain of its executives for securities fraud. The lawsuit was filed in the U.S. District Court for the Middle District of Florida.
On May 6, 2021, before the markets opened, analyst Hindenburg Research issued a scathing report concerning PureCycle. In its report, Hindenburg wrote that “PureCycle represents the worst qualities of the SPAC boom; another quintessential example of how executives and SPAC sponsors enrich themselves while hoisting unproven technology and ridiculous financial projections onto the public markets, leaving retail investors to face the ultimate consequences.” Hindenburg explained that it spoke with “multiple former employees” of earlier companies that PureCycle’s CEO and other associated executives took public before PureCycle, “who said that PureCycle’s executives based their financial projections on ‘wild ass guessing,’ brought companies public far too early, and had deceived investors.” On this news, PCT shares plummeted from their May 5, 2021 close of $24.59 to a May 6, 2021 close of $14.83, on unusually heavy volume. This represents a one-day loss of approximately 40%.