Short seller alleges Standard Lithium technology does not work (updated)

Standard Lithium

03/02/2022 16:21

(Adds details from short seller's report, background on
company, stock movement)
    Feb 3 (Reuters) - Short seller Hindenburg Research on
Thursday alleged that Standard Lithium Inc's  SLI.V  plan to
produce lithium for electric vehicle batteries in Arkansas is
based on technology that does not work, sending the company's
stock down 15%.    
    Hindenburg, which did not disclose the size of its short
position, alleged that Standard's technology is "struggling out
of the gate" and is based on patents that were rejected by U.S.
officials.
    Representatives for Vancouver-based Standard were not
immediately available to comment.
    Short sellers sell borrowed shares in the hope of buying
them back at a cheaper price and pocketing the difference.
    Standard is part of a growing wave of companies attempting
to use direct lithium extraction https://t.co/NMXbVQV6sy(DLE)
technologies to produce the white metal at commercial scale. The
technologies differ by company, but share the goal of using less
land and groundwater than hard rock mining and evaporation
ponds, the traditional ways to process lithium.
    Standard has said its proprietary DLE technology uses an
adsorption process to filter lithium from brine, which it
sources from a Lanxess  LXSG.DE  bromine facility https://www.reuters.com/article/us-standard-lithium-lanxess-jointventure/standard-lithium-lanxess-mull-arkansas-lithium-joint-venture-idUSKCN1NH0G8
 in Arkansas. The company is running a pilot demonstration
plant, but has not produced or sold commercial quantities of
lithium.
    Effectively, Standard promises to extract lithium from
wastewater in a way that would have very little environmental
footprint, a tantalizing prospect for investors and automakers.
    Lanxess, though, believes Standard has yet to demonstrate
the project's "proof of concept," Hindenburg said, citing
unnamed Lanxess officials. A Lanxess spokesperson was not
immediately available to comment.
    Koch Industries Inc became Standard's largest shareholder
last fall with a $100 million investment. Hindenburg said "Koch
missed red flags and failed in its due diligence in its haste to
deploy capital."
    A Koch spokesperson was not immediately available to
comment.
    Hindenburg also alleged that Standard is part of a
long-running stock promotion scheme by Chief Executive Officer
Robert Mintak. Mintak was not immediately available to comment. 

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 (Reporting by Ernest Scheyder; Editing by Bernard Orr)
 ((ernest.scheyder@thomsonreuters.com; Twitter: @ErnestScheyder;
+1-713-210-8512; Reuters Messaging:
ernest.scheyder.thomsonreuters.com@reuters.net))