IperionX leads ASX 200 losses after short seller report
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More news: Critical minerals supplier IperionX led losses on the ASX 200 after hitting back at Spruce Point Capital for its short seller report last week that said the stock could be "significantly overvalued".
IperionX shares were down 9.6% to $5.07 at 1:20pm AEDT, having climbed 40% over the last 12 months.
IperionX received no outreach from Spruce Point Capital before issuing short seller report
The news: IperionX has responded to claims made against it in a short seller report by Spruce Point Capital and argued that it has no record of the investment manager attempting to contact the titanium producer and parts manufacturer before issuing the report.
The numbers: IperionX released a short seller report on 12 November that warned investors that IperionX could be “significantly overvalued, with potential downside risk of 70%-95% under certain scenarios outlined”.
The context: Spruce Point made several arguments against IperionX’s management, sales strategy, scalability of its technology and revenue streams.
This includes a claim that its management and technical advisors have been associated with previously troubled enterprises like Piedmont Lithium “which faced allegations from two short sellers that it was a stock promotion with ties to a banned Australian stockbroker and had various financial and operational shortcomings”.
Spruce Point also argued that the titanium powder market “is already oversupplied with 3.5x more capacity than shipments”, questioned whether IperionX’s HAMR technology could displace the 70-established Kroll process and expressed concerns about upcoming revenue.
Spruce Point also claimed that “a recent site visit to IPX’s U.S. headquarters revealed what appeared to be an empty office with stacked boxes, mail on the ground, and outdated investor materials”.
IperionX flagged that Spruce Point Capital “has never visited, or requested to visit, IperionX’s titanium manufacturing operations in Virginia” where “nearly all operations, workforce and administrative activities” have been moved, away from an office in North Carolina.
The remainder of IperionX’s response to the short seller report includes a reiteration of the company’s participation and receipt of US Department of War contracts, its 2026 priorities and highlighted that its “core growth opportunity” is for finished titanium components rather than titanium powder.
The sources: ASX, Spruce Point Capital report
