Pomerantz Appointed Lead Counsel in PureCycle Technologies Securities Litigation

On August 5, 2021, U.S. Magistrate Judge Gregory J. Kelly of the Middle District of Florida (Orlando Division) appointed Pomerantz LLP as Lead Counsel on behalf of Robert and Mariusz Ciecko, the Lead Plaintiff in Theodore v. PureCycle Technologies, Inc. et al., 6:21-cv-809 (M.D. Fla.), a securities action brought on behalf of a class of defrauded investors concerning allegations that PureCycle Technologies, Inc. (“PureCycle” or the “Company”) had based its “ground-breaking, patented recycling process” on unproven technology and its financial projections were baseless.

PureCycle recycles waste plastic through a proprietary process, licensed from Procter & Gamble, that removes color, odor, and other contaminants from feedstock to produce recycled polypropylene, a commodity plastic that is used in packaging for consumer products, textiles, and plastic parts for various industries.

Allegations against PureCycle include that: (i) the technology PureCycle licensed from Procter & Gamble was not proven and presented serious issues even at lab scale; (ii) the challenges posed by the availability and competition for the raw materials necessary to commercialize the licensed technology were significant; and (iii) as a result of the foregoing, PureCycle’s financial projections were baseless.

On May 6, 2021, Hindenburg Research (“Hindenburg”) published a report addressing PureCycle.  The Hindenburg report asserted that “PureCycle represents the worst qualities of the SPAC boom; another quintessential example of how executives and SPAC sponsors enrich themselves while hoisting unproven technology and ridiculous financial projections onto the public markets, leaving retail investors to face the ultimate consequences.”  The Hindenburg report cited conversations with “multiple former employees” of earlier companies that PureCycle’s Chief Executive Officer and other associated executives took public before PureCycle, “who said that PureCycle's executives based their financial projections on ‘wild ass guessing,’ brought companies public far too early, and had deceived investors.” 

On this news, PureCycle’s stock price fell $9.76 per share, or 39.69%, to close at $14.83 per share on May 6, 2021.