Sunrun is worth up to 90% less than what the street says: short sellers

Sunrun Inc (NASDAQ: RUN) is up extra than 40% since Sen. Joe Manchin obtained behind the “Inflation Reduction Act of 2022,” which goals to pump $369 billion into clear power options.

Muddy Waters sells short Sunrun shares

Still, Muddy Waters Research warns that the dwelling solar panel and battery storage firm is worth up to 90% less than what it is telling the street. Speaking on CNBC’s “Squawk Box,” Carson Block — CEO of the due diligence-based funding agency — mentioned:

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Sunrun tells traders that after all of this debt is gone, there shall be vital worth for shareholders. They obtain it by very aggressive modelling, assumptions that simply aren’t credible.

Run is already down about 10% for the yr, however he believes the inventory has “way more” down from right here.

Sunrun is anticipated to report its second-quarter monetary outcomes on Wednesday. Analysts predict a lack of 12.6 cents per share on a 25% year-over-year enhance in gross sales.

Sunrun’s fundamentals are overrated

Fundamentally, the chief government added, Sunrun is a fragile firm with “overvalued” subscriber numbers and property. Carson additionally has an issue with how the Nasdaq-listed firm claims tax credit.

They forecast the funding tax credit score they are going to get, after which they go and say, hey, give us a tax credit score on that tax credit score. This recursive approach of evaluating tax credit, it is a farce to say that this is the intention of Congress.

Sunrun wants to problem extra shares to shut the 50 cent-per-watt funding hole, he concluded. Muddy Waters Research has been proper about its short bets in the previous.

Also on Tuesday, legendary short vendor Jim Chanos posed questions on the “fundamentals” and web current worth of San Francisco-based Sunrun Inc.

So $RUN would really like you to imagine that their Net Present Value mannequin, which assumes 90% client renewal after 20-25 years, has no credit score losses (!)…is reasonable?! lol okay @SquawkCNBC https://t.co/15xaTmBOPi

— Diogenes (@WallStCynic) August 2, 2022 Invest in crypto, shares, ETFs and extra in minutes with our most well-liked dealer,

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