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We do our best to find and present facts, based on extensive primary research and using public sources.
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We do our best to find and present facts, based on extensive primary research and using public sources.
But we will profit if these stocks decline or, when we are long, rise in value.
We do not offer advice on how to trade a stock. We present our views.
Updated Report:
J Capital is short Microvast Holdings (NASDAQ: MVST)
More People Than Expected, Still a China Hustle
- On November 22, MVST’s chairman posted videos on his LinkedIn account showing significant activity in the Huzhou factory. We sent people to the plant to verify and found that the company does, in fact, have many employees, but, based on our research, nowhere near the 2,500 the chairman claimed. We are re-issuing this report to fairly and correctly address the company’s recent public statements.
- We think the majority of MVST’s sales may be fake. MVST’s Chinese customers account for 57% of revenue in 2023, but the
China factory is quiet and we believe produces little.MVST China has disappeared from Chinese procurement lists, and local competitors say the company is not making discernible sales. We are skeptical of the revenue shown in local financial statements. - We suspect MVST knew a DOE $200 mln grant for a U.S. factory addition had been rescinded but failed to inform investors until the information hit Reuters months later, and MVST had no choice but to disclose.
- We question the company’s reported backlog, currently $678.7 mln. Backlog growth is much higher than revenue growth. There was a $189 mln jump in Q2 2023, but the only visible addition came from a December agreement with REE Automotive -
whose entire revenue is less than $1 mln. Regardless, based on the company’s track record, this could end up being a backlog of future losses. - MVST is a Chinese EV battery business that has failed. MVST, whose operations were almost all in China before the merger
with Tuscan Holdings, nearly went bankrupt in 2019 but was saved by the SPAC. Tuscan had been seeking cannabis targets but settled on batteries.
Microvast's Huzhou facility: little activity. Photo by J Capital, October 9, 2023 2:48 pm
FEATURED REPORTS
Lake Resources (LKE ASX) “Lake” is one of several lithium explorers planning to use an unproven direct lithium extraction (DLE) technology to remove lithium from brine. If Lake can get the DLE technology to work then it plans to build a $1 bln processing facility in a remote location in the Andes.
Lake is claiming to produce “cleaner lithium.” We believe, however, DLE will still use large amounts of water and produce toxic waste. Lake has failed to get an operational pilot plant on site three years after promising it would. Lake insiders have successfully sold $8.1 mln in stock in the last year. Lake granted 41.5 mln options to financial institutions that published favorable research on the company. Insider share sales have followed a pattern of Lake announcement, followed by favorable research, stock price rise, and then insider sales. Investors had been expecting the delivery of the pilot plant to site and a definitive feasibility study (DFS) by the end of June. Instead, they got the resignation of the CEO and Managing Director Steven Promnitz without a replacement. |
For the last 15 years, we believe NovaGold’s management team has systematically misled investors with subjective presentation of information about a deposit so remote and technically challenging that the mine will never be built. During that time, management has been treating this 12-person concept company like an ATM, awarding themselves base salaries that rival those of the CEOs at Newmont and Barrick and total compensation packages comparable with those at Rio and BHP. If the information from the company’s feasibility studies were presented in a more honest light, investors would understand that the Donlin deposit, of which they own 50%, is not feasible to put into production at any gold price.
We think management misleads investors with custom metrics designed to deceive, directing investors to presentations which claim the deposit will require $6.7 bln in capital, however, the feasibility study clearly shows this number is $8 bln (already, we believe, far too low). The proposed natural gas pipeline central to powering the project is dead on arrival. The terrain around the Donlin deposit is among the most inhospitable on the planet. Based on recent cost-per-inch/mile data we obtained from ICF, we show the costs of the pipeline (if someone were even to attempt to build it) are likely in excess of $3 bln, two to four times higher than management’s previous forecast. One engineer we spoke with who worked on costing the pipeline told us he doesn’t know of any engineering company that has the experience to build such a complex pipeline. Management has a long history of over-promising. The Galore Creek project, once promoted as the company’s key asset, was quietly sold at a loss in 2018 after revised capex estimates increased by 5x. In short, this is a stock promote, not a mining plan. |
CBAK Energy Technology Inc. (CBAT) represents the barely re-animated corpse of CBAK, a Chinese reverse merger that lost all its manufacturing assets to default in 2014. In 2015-16, CBAT raised $113 mln from investors to build new factories—and, we will show, appears to have simply taken a lot of that ...
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Opinions are intended to provide insight on macroeconomic issues and commentary is not intended as individual investment advice or a recommendation or solicitation to buy, sell or hold any security or to adopt any investment strategy.
Investments involve risk. The value of investments can go down as well as up, and investors may not get back the full amount invested. The information contained in these reports has not been reviewed in the light of your personal financial circumstances. Reliance upon the information is at your sole discretion.
The reports and other commentary displayed are for information purposes only and should not be relied upon as investment advice. The information provided is not a complete analysis of every material fact regarding any country, region, or market. Because market and economic conditions are subject to change, comments, opinions and analyses are rendered as of the date of this posting and may change without notice.
Opinions are intended to provide insight on macroeconomic issues and commentary is not intended as individual investment advice or a recommendation or solicitation to buy, sell or hold any security or to adopt any investment strategy.
Investments involve risk. The value of investments can go down as well as up, and investors may not get back the full amount invested. The information contained in these reports has not been reviewed in the light of your personal financial circumstances. Reliance upon the information is at your sole discretion.