2023-03-21 10:25:34 ET
Sigma Lithium ( NASDAQ: SGML ) -6.2% in early trading Tuesday after short seller Grizzly Research released a negative report on the company, saying "bogus feasibility studies and production delays will leave investors praying for a buyout."
The stock has surged another 200% over the last 12 months on speculation of a buyout ahead of the start of production, but "not only do we believe a deal is unlikely to materialize, we also have identified numerous red flags with SGML's operations," Grizzly's report said.
"Even ignoring the low likelihood of the company being sold, we seriously doubt SGML has the resources required to deliver on the project which has already been delayed multiple times," according to the report, which notes the company was originally expected to launch production in 2019.
Sigma Lithium's ( SGML ) valuation has been raised by feasibility studies which assume lithium prices ~87% above figures in reputable industry studies, Grizzly said, believing the company has "intentionally overstated the speed at which it can ramp production."
Sigma Lithium ( SGML ) shares surged in mid-February on speculation that Elon Musk was weighing a takeover offer for the company .
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Sigma Lithium slides as Grizzly Research dismisses buyout speculation