Muddy Waters alleged XL Fleet inflated its sales pipeline and misrepresented customer relationships and product performance following its SPAC merger, based on interviews with former employees and customers.
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The SPAC pipeline problem
De-SPAC projections are marketing documents. The report tested XL's against the people who would have had to deliver them.
Findings
- Former employees described a pipeline padded with speculative and dormant opportunities
- Customer references did not support claimed fuel-economy performance
- Revenue recognition and installation capacity inconsistent with projected ramp
The conclusion
Projections detached from the operational reality of installation and demand.
subsequent events
- 2021-03-03Report published; shares fall sharply
“The pipeline is padded with opportunities that were never real.”
- 2021-05-01SEC inquiry disclosed
- 2021-12-31Leadership changes; shares down over 80% from highs
Source — https://muddywatersresearch.com/
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