Muddy Waters is short XL Fleet Corp. (NYSE: XL) because it strikes us as middle of the fairway SPAC garbage. We conclude that the real green technology at XL is duping investors into throwing money at this company through a collection of exaggerations, half-truths, and mistruths. XL’s previous equity raise (Series D) appears to have been at a valuation of approximately $73 million, which is a far cry from its SPAC valuation.
Former salespeople stated that they were pressured to inflate their sales pipelines materially in order to mislead XL’s board and investors. These former salespeople and other employees also told us that XL misleads its customers about performance and savings; and, that due to these exaggerations, customer reorder rates are in reality quite low. (One former employee ballparked the reorder rate at only 10%.) We also understand that roughly half of the customers XL touts in its investor presentation are inactive.
We give very little credence to the narrative that XL will be a serious player in full vehicle electrification. It appears to have little valuable proprietary technology. In fact, some former employees laughed out loud when we asked them whether XL can compete in EVs.
Although XL is capable of announcing a “strategic partnership” that “includes the opportunity to explore” installing charging stations at the arena where its SPAC promoter’s team plays, we doubt that its EV technology will allow it to do much more than pump out highly promotional press releases. We see little reality to the Blue Sky story with which this stock has been promoted.
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