The shorts have arrived for Enviva (NYSE:EVA), and the consequences have not been nice. The wood pellet manufacturer’s share price fell by more than 13% on Wednesday after a short-seller published a damning report on its business practices and fundamentals.
Market Analysis of Enviva Stock
Blue Orca, a highly aggressive and vocal short seller, has targeted Enviva stock (NYSE:EVA). It declared on Wednesday that it is shorting the specialty energy sector supplier, accusing it of, among other things, greenwashing.
“We feel that Enviva is the newest ESG farce, a result of crazy European climate subsidies that reward the destruction of American woods so that European power corporations may check a bureaucratic box,” the short seller stated.
Blue Orca accuses the corporation of “classic greenwashing,” claiming that GPS data shows that, contrary to its claims, it obtains its wood pellets from clear-cutting operations (in which entire sections of forest are completely stripped of their trees).
According to Blue Orca, Enviva also has “troubling cash flows, risky debt, and [an] unsustainable dividend.” The short seller believes that these reasons and environmental worries will cause its stock price to fall dramatically from its present “nosebleed value.”
Enviva has yet to reply officially to Blue Orca’s claims.
So, what now?
Blue Orca, a prolific short-seller, doesn’t mince words when it comes to selling its cases. “Ultimately, we believe that any real ESG investor or allocator should be ashamed to buy this company,” stated of Enviva. That argument seems to resonate with investors, who have already reduced the stock (NYSE:EVA) price by over 20% since the beginning of the year.
Featured Image – Megapixl © Timonschneider
Author Okoro Chinedu 
