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HASI.US
id: 170, Created by Stan Vick, Scout
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On July 12, 2022, market analyst Muddy Waters Research published a report summarising: "We are short Hannon Armstrong Sustainable Infrastructure Capital, Inc. (HASI) because its accounting is so complex and misleading that its financial statements are effectively meaningless. HASI is a prime example of how public market incentives can warp a company into relentlessly destroying value to feed a Wall Street growth narrative. Most of HASI’s income is both non-cash and unrealizable: It has little relationship with cash to be received in the future. HASI misleadingly inflates GAAP earnings in three ways: 1) Through a loophole in the arcana of accounting for renewables subsidies, HASI books non-cash unrealizable income relating to third parties’ tax credits that will be reversed; 2) HASI produces non-cash income by manipulating the discount rate it applies to residual assets to implausibly low levels, thereby inflating its gains on securitizations; and, 3) HASI books interest income from non-cash “Paid in Kind” (“PIK”) interest payments, which are essentially IOUs from stressed borrowers.
On this news, HASI stock price fell by 19%, to close at $29.41.
Alleged Offence
Mismanagement,
Financial Misrepresentation,
Fraud,
Failure to Disclose,
Malpractice,
Negligence,
Omissions
Suspected Party
Directors,
Management,
Service Provider,
Research Entity
Security Type
Stocks
Trade Direction
Long
Shock Event Date
12 July 2022