Watching PureCycle; Bleecker Street Research Issues Second Report On Co Titled "It Looks As Bad As It Smells"
Portfolio Pulse from Benzinga Newsdesk
Bleecker Street Research has issued a second report on PureCycle Technologies (PCT), highlighting operational issues and the risk of imminent default due to the company's inability to meet production milestones. PureCycle's Ironton facility has faced production shortfalls, leading to a planned shutdown for repairs. The company's debt-heavy capital structure and stringent municipal bond covenants pose a significant risk, as failure to meet production targets could trigger default. The report suggests that PureCycle's equity could become worthless if it defaults, as its assets are collateralized against its bonds. Bleecker Street Research remains short on PCT shares.
November 15, 2023 | 2:50 pm
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PureCycle Technologies faces significant risk of default due to operational issues and failure to meet production milestones, which could render its equity worthless as all assets are collateralized against its bonds.
The report by Bleecker Street Research indicates that PureCycle Technologies is struggling to meet production targets and is at risk of defaulting on its municipal bonds. Given the company's heavy reliance on debt financing and the collateralization of its assets, failure to meet these targets could have severe consequences for the company's financial stability and the value of its equity. The negative sentiment expressed in the report, combined with the detailed analysis of the company's financial and operational challenges, suggests a high likelihood of a negative impact on the stock price in the short term.
CONFIDENCE 90
IMPORTANCE 100
RELEVANCE 100