Some things stick out when you learn something new. One of them is that in 2022 only 55 of the fortune 500 companies from the 1950's are still in business. Some didn't change and some became Radio Shacks. Some were mining and fads that disappeared at large. So in the case of doing research on something completely unrelated the comment Ward of the court stuck out. When I googled the definition it says that it describes somebody who a court declares legally incapacitated and has had some or all of their rights removed.
Some random law learning for the day.
ESG is supposed to be about environmental, social, and governance and is a fantastic concept that was created to help improve standards across large corporations across the globe. Unfortunately an analyst at Muddy Waters research has a new meaning for ESG and it has nothing to do with the environment instead Hannon Armstrong stock is plummeting on the news of Muddy Waters saying in this instance it stands for Exaggerated, Scamming, and Grifting.
Now Hannon Armstrong is fighting back (Sounds like they could use a Brandefender to help they navigate this PR crisis. Their statement to CNBC is:
"The 'report' by this deceptive short-seller, for which the Justice Department is investigating for suspected coordinated manipulative trading, is an attempt to mislead and confuse the market. The report is replete with factual errors and numerous inflammatory and misleading statements ,Hannon Armstong's accounting is fully compliant and indicative of our performance. We are proud of our long history of transparent disclosure and best-in-class accounting practices."
Carson Block of Muddy Waters Research says its the first US public company dedicated to ESG where the disclosures were being declined and after a lot of digging into joint venture partners, PMI, Delaware UCC filings, former employees and the company has odd accounting practices with renewable projects with tax equity investments. While not illegal the book value change is taking the tax credit value and runs it as through its old income.
It's larget EMI Jupiter lost 380 million last year.
Disclosure I do not own or invest in Hannnon Armstrong HASI at this time but hope that those focusing on ESG are actually doing so to improve the environment.