Bleecker Street Research has placed a short bet on U.S.-based cleantech 374Water, citing the wastewater treatment company’s ‘‘precarious’’ financial position and ‘‘lack of commercial appeal.’’ The short outfit put a 95% downside target on the stock.
Bleecker Street said in a report Thursday morning that 374Water’s product has seen little interest from potential customers and that this is unlikely to change in the near future. Citing this and the fact that 374Water has less than $1 million in total revenue and $8 million in cash, the short outfit contended that the company is vastly overvalued at its $300-million market capitalization.
‘‘We think the company is underfunded, is promoting a technology that has been around for a long time and has shown no signs of economic traction in the marketplace,’’ wrote Bleecker Street.
374Water claims to have the technology to take municipal and industrial waste and turn it into clean, drinkable water. Its product, which is the size of a shipping container, is referenced as costing between $3 million and $5 million to build.
The company went public a little over two years ago after merging with PowerVerde, a company that was led by an individual previously involved in a large Ponzi scheme, Bleecker Street stated in its report.
374Water shares were down 9% in early trading Thursday in New York. The stock was recently added to the Russell 3000 index. Bleecker Street called 374Water ‘‘the most overvalued and overhyped stock’’ coming into the broad market index, and said the stock’s 1,500% surge since the reverse merger is in part the result of stock promotion efforts.