- Shares of XL Fleet tumbled as much as 20% on Wednesday as Carson Block of Muddy Waters Research revealed he was short the company.
- Block said that conversations with former XL Fleet employees revealed “a collection of exaggerations, half-truths, and mistruths.”
- “This is a SPAC bubble, where all kinds of garbage is being foisted on the public markets and that XL is middle of the fairway SPAC garbage,” Block said.
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In a report released on Wednesday, Block alleged that XL Fleet is misleading investors with an inflated sales backlog. Much of Block’s research was based off of conversations with former employees of the company.
XL Fleet transforms gas-powered vehicles into hybrids, and it went public late last year via a reverse merger with a SPAC at a valuation of about $1 billion. But Block thinks shares are overvalued based off of its Series D financing that valued the company at around $73 million. The company currently trades at a valuation of about $2 billion.
“I can’t believe they’re a public traded company. I’m literally dumbfounded that this actually happened,” a former XL Fleet employee told Block.
Since hitting an all-time-high of $35 shortly after it completed its SPAC merger in late December, shares of XL Fleet have plummeted as much as 63%.
And Block isn’t constructive on SPACs broadly as they continue to flood the market, according to an interview with Zer0es.tv seen by Insider.
“This is a SPAC bubble, where all kinds of garbage is being foisted on the public markets and that XL – at least in our view – middle of the fairway SPAC garbage,” Block said.