Bloom Energy is responding forcefully against allegations made by short seller Hunterbrook Capital, rejecting the firm's claims about its accounting, supply chain and growth prospects a day after a report sent shares sharply lower.
The clean energy company said Thursday that Hunterbrook's assertions regarding its financial reporting and access to critical raw materials are "false and misleading," according to a statement reported by Bloomberg.
The response comes after Hunterbrook published an investigation on July 8 that questioned Bloom's independence from Chinese suppliers and argued that the company's long-term manufacturing ambitions may be constrained by global scandium availability. Hunterbrook disclosed that it stands to benefit if Bloom's shares decline through a short position.
Bloom specifically defended its financial reporting, saying allegations concerning its accounting are contradicted by its audited financial statements. The company also disputed Hunterbrook's central thesis surrounding scandium oxide, the specialty material used in Bloom's solid oxide fuel cells.
Bloom said it has sufficient scandium oxide supply to meet both current production needs and its existing customer backlog. It added that its scandium supply is not dependent on China, either for current operations or future demand growth. Looking further ahead, Bloom said it has visibility across its supply chain sufficient to support production capacity of 25 gigawatts of fuel cells annually, adding that it expects to continue expanding that capacity over time.
Hunterbrook's report, published Wednesday under the title Bloom's Big Lie, argued that Bloom's public messaging about its supply chain conflicts with trade data and supplier relationships. According to the investigation, multiple international trade routes appear to connect Bloom's supply chain to Chinese sources of scandium despite repeated statements from CEO K.R. Sridhar that the company has "no China supply chain."
Hunterbrook said its research relied on global shipping records, corporate filings and satellite imagery. The report also cited a representative from Chinese producer Hunan Oriental Scandium who allegedly identified Bloom as one of its largest customers.
The report further argued that Bloom's long-term manufacturing targets face a fundamental resource constraint. Hunterbrook estimated that producing five gigawatts of fuel cells annually would require roughly 220 tons of scandium oxide each year, nearly the entire projected global supply of approximately 240 tons, raising questions about whether the company's expansion plans are feasible.
Hunterbrook also challenged Bloom's reported order backlog. The firm argued that while Bloom has discussed an approximately $20 billion backlog, audited contractual performance obligations are substantially smaller, at roughly $492 million, suggesting investors may be overstating the visibility of future revenue.
The report helped send Bloom shares down roughly 6% on Wednesday. Bloom's Thursday response marks its formal rebuttal to the allegations, with the company maintaining that its audited financial statements, supply chain and access to scandium fully support its current operations and future growth plans.
Recall, back in 2019 now-defunct short seller Hindenburg Research also took on Bloom, highlighting "trick accounting", claiming "Bloom’s technology is not sustainable, clean, green, or remotely profitable" and raising a question to the company about how important the price and supply of scandium was to the company's supply chain.