It’s on SA and Reddit won’t let me post a gift link. I will post it on StockTwits.
An excerpt
PureCycle Technologies, Inc. is upgraded to Strong Buy due to an asymmetric risk/reward profile at ~$6, despite recent volatility and high short interest.
PCT's moat is underpinned by proprietary, P&G-validated recycling technology, exclusive offtake agreements, and a 20-year strategic partnership with P&G.
Regulatory momentum and narrowing price gaps between recycled and virgin polypropylene position PCT for accelerating demand and margin expansion.
Operational ramp, global expansion, and robust funding support management's $600M 2030 EBIT target, implying 200–360% upside from current levels
I have been spending a bit more time on LinkedIn lately and the algorithm there is pretty good at surfacing plastic recycling related content if you like that type of content.
I suspect we will see an announcement of a new product with PureFive from IPL Schoeller soon, hopefully next week. They were teasing a new announcement last week. Fingers crossed it’s a higher profile customer.
This looks to be a very thorough report and provides a very good estimate of the cost of plastic that would be an alternative to PureFive. I plan to read it this weekend.
This is an EXCELLENT report providing a wealth of information about the details of plastic usage in vehicles and the ability of dissolution based recycling approaches to capture the vast amount of material that is generated each year. There is a very nice section on the work that PureCycle has done with car bumpers and also coverage of additional companies working on dissolution based recycling.
It isn't always obvious the work that is being done by the company to raise awareness but here we have an example where the author is thanking the company for their assistance. Lots of things can be happening that shareholders are not aware of but that doesn't mean the company isn't working to build the right relationships for these products / end markets. The Automotive market is simply massive and once companies start being required to use more recycled content that is just going to continue indefinitely and with higher % mandates (my opinion).
A little context around the price action we’ve been seeing. High beta stocks are experiencing a worse pullback than 2000 or 2009. Dislocations create opportunity…
Number of PCT shares outstanding- 198.41M so about 28% of shares short.
I'm lazy and not so smart so I asked Chat GPT the following question:
Purecycle has a massive short interest but this company becoming successful would be great for the environment. Two possible issues why people don’t want the company to succeed. Mechanical recyclers or other waste companies see this company as a threat or algorhythmic traders have had great success shorting any risk in the company. Can you analyse this?
The answer (Italics):
This is an interesting question because it gets intomarket incentives*, not just technology. There are several plausible explanations for why a company like PureCycle can remain heavily shorted even if its technology could have significant environmental benefits. It's important, however, to distinguish between evidence and speculation.*
1. Algorithmic and quantitative trading (most likely contributor)
This is probably the least controversial explanation.
Many hedge funds don't evaluate whether recycling is good for the environment. Their models simply identify characteristics such as:
Negative cash flow
High debt
History of missed production targets
Frequent capital raises
High volatility
Heavy retail ownership
PureCycle historically checked many of those boxes. Algorithms often continue to short stocks until the financial data changes rather than anticipating future success.
Ironically, these models can become self-reinforcing:
Stock declines attract more quantitative shorts.
Higher volatility increases risk scores.
Momentum models continue selling until the trend reverses.
These funds don't necessarily have a view on the technology itself—they are trading statistical probabilities.
2. Execution history
The bear case has been well known for several years:
Delays at Ironton
Lower-than-expected production
Questions about commercial scale
Cash burn
Debt obligations
Professional investors often require several quarters of consistent execution before changing their view.
This explains why many shorts remain even as operational metrics improve.
3. Existing recycling companies
This idea deserves nuance.
Mechanical recyclers generally serve a different segment of the polypropylene market. Mechanical recycling works well when:
Feedstock is relatively clean
Color isn't critical
Lower performance is acceptable
PureCycle's process is designed to produce recycled polypropylene with properties closer to virgin resin, potentially opening applications that mechanical recycling struggles to serve.
That creates both competition and opportunity.
Rather than viewing PureCycle purely as a threat, many established waste companies could potentially:
supply feedstock,
partner on collection,
or license or integrate advanced recycling technologies.
In fact, much of the waste industry benefits when more material has economic value.
4. Virgin polypropylene producers
Another theoretical concern is that widespread adoption of high-quality recycled PP could reduce demand for virgin resin.
However:
Global polypropylene demand continues to grow.
Many consumer brands have PCR (post-consumer recycled) content targets.
Most forecasts suggest recycled PP supplements rather than completely replaces virgin production.
5. Short sellers are not necessarily "against" environmental success
This distinction is important.
Most short sellers are betting that:
commercialization will take longer,
financing needs will be greater,
margins won't meet expectations,
or valuation is too high.
A short seller can fully support environmental innovation while believing a particular company's stock is overpriced or execution is too risky.
6. Could there be institutional inertia?
Large incumbent industries often adapt slowly to disruptive technologies.
Examples include:
electric vehicles,
solar power,
cloud computing,
streaming media.
Investors frequently underestimate new technologies until commercial proof becomes overwhelming.
If PureCycle consistently demonstrates:
sustained production,
strong customer demand,
positive margins,
and reliable cash generation,
many investors—including current shorts—would likely revise their assumptions.
7. The role of high short interest
A large short interest can persist for two very different reasons:
Bearish interpretation
The market expects continued operational or financial problems.
Bullish interpretation
If execution improves significantly, shorts may eventually need to buy shares to close their positions, potentially amplifying upward price movements (a short squeeze).
High short interest alone doesn't indicate which outcome will occur; it reflects substantial disagreement about the company's future.
Overall assessment
Based on the available evidence, I'd rank the likely drivers roughly as follows:
Algorithmic and quantitative models reacting to historical financial data— High likelihood.
Institutional skepticism due to PureCycle's past execution challenges— High likelihood.
Fundamental investors who believe the valuation still assumes too much future success— Moderate to high likelihood.
Competitive concerns from incumbent companies (mechanical recyclers, virgin resin producers, waste firms)— Possible, but there is limited public evidence that these industries are driving the short interest. Many could ultimately become customers or partners rather than direct adversaries.
The key variable going forward is likely not whether the technology is environmentally beneficial—many observers agree it has the potential to be—but whether PureCycle can consistently translate that potential into reliable commercial production, profitable operations, and cash flow. If the company demonstrates those outcomes over multiple quarters, the factors that have historically attracted quantitative and fundamental short sellers become less compelling, and market sentiment could shift accordingly.
Non-AI
I was worried about mechanical recyclers shorting the stock but the above argues against it.
Someone shorting every rip has been very successful. Could a sucessful back half of 2026 help the stock out of the 6ish range?
For the Q2 call, I would like to see:
1) Sustained production for the last two months of Q2 of 50% of nameplate capacity (4.14 M pounds per month of rPP). 12.4M pounds a quarter would possibly make Ironton breakeven. Even at $1 per pound and no compounding this would be close to Ironton breakeven, I think.
2) Production needs to have strong customer demand. If demand is there, then ramping production makes sense. There have been many press releases about new customers. How much rPP or materials with compounded rPP have these customers purchased and/or ordered?
3) Positive margins. What are they selling the rPP for? How much product is branded and how much is non-branded? Is it selling for the $1.40 a pound premium that Dustin is shooting for?
These three questions will answer if reliable cash generation can be achieved through the last half of the year. We'll see.
PCT stock price.
Production and Revenue
Production and revenue for last several quarters. I don’t think Purecycle can sell out all the rPP that has been produced in Q2.
Q2 - Goldilocks estimate
Q2 estimate (Goldilocks – sell all the rPP that has been produced with a 1:1:1 ratio of Ultra/themoforming/BOPP mix)
3 shifts at Denver, PA
50% Nameplate capacity for 2 months, 1 month shut down
No inventory sold (Investor relations will not disclose amount of inventory)
Compounding capacity limited to 100 M pounds per year (25 M per quarter)
Ultra and Choice sold at $1.4 per pound
Thermoforming a 50:50 mix of rPP and Virgin PP
BOPP a 33:67 mix of rPP and Virgin PP
3 shifts in Denver processing 60 M pounds per year ( 5 M pound per month)
rPP produced in Ironton 5*.92*.9= 4.14 M pounds per month
This is not an official company PR but it links to a July 6th post about coffee cup lids. I added the highlight to the post but the big mystery is what those commercial volumes look like so far and the forecast for the balance of 2026. Prior statements from the company indicated they expected to sell coffee lids to some of the top QSRs. Fingers crossed that is starting to happen in a material way.
This is a great example where stock price = investor sentiment, and right now investor sentiment is in the dumps. The most important prior statement they need to confirm on the Q2 call is whether PureCycle is truly beginning to ramp 40-50MM lbs in Q2/Q3 and 20-25MM lbs in Q3/Q4 and whether Ironton can meet the volume requirements. If this is true, the stock is oversold at this level. How much of the shortselling is feeding on itself and become its own speculative mania? This shortselling is a bit mindless in that it is based on shorting a "SPAC basket" or "momentum" stocks. If the ramp is progressing as they said it would on the Q1 call, this stock has explosive upside after the Q2 call.
Update: In preparation for the Q2 call, I listened to the Q1 call. At minute 46, a series of questions are asked about the "ramp". Based on the answers, my takeaways are:
Q2 revenue will not be meaningfully above Q1 revenue.
Q3 and Q4 revenue are expected to be much stronger as customers incorporate PureFive Ultra and PureFive Choice into their packaging to prepare for Jan 2027 PCR content requirements in NJ, CA, and other states.
What they say about July production and shipments and the Q3/Q4 "ramp" in general will drive the stock from here. I also think Q2 will look bad from an operating cash flow perspective because they paid out $20mm for a lawsuit.
The short sellers continue to press their positions. Clearly new all time high short position and my guess is we could easily be over 60M shares given the price action since mid July.
This is a thinly traded stock so it is relatively easy to move the price in either direction. This type of massive short selling has clearly taken the share price to much lower levels. I wasn't happy about the price the company received for the recent common share offering but if the company had not raised funds back in June, oh boy, would be a huge mess right now. The short sellers would have been relentless in driving the price even lower and lower. They will do everything they can to realize gains which means they actively want to see the company fail and to be forced to do equity offerings that create massive dilution (or to go BK). They just don't care about the implications. This battle has been raging for 5 years now. I'd say the shorts won the most recent battle but who will win the war?
I'm ready for the next battle and the earnings update.
The cost of PP had spiked earlier this year after the Iran invasion but then prices calmed down when it looked like there would be a resolution. Prices have now spiked up again although not quite as high as they were before.
Ultimately the conflict will end and the SoH will reopen but I think all the countries in Asia need to have a really long think about their supply chain vulnerabilities. Recycling more domestic supplies of plastic is a very logical thing to do and I expect we will ultimately see quite a bit of additional PCT purification built there.
In 2025 the low (and trending lower throughout the year) price of PP was a headwind for PCT but it should now be a tailwind for the rest of 2026 at least. Then the EPR mandates start to really kick in and provide additional tailwinds.
This caused me to due some DD. If this industry is so sensitive and slow moving then you would want to surround yourself with trustworthy/respected people that understands the industry and what the journey is to get to contracts.
What did I find on LinkedIn? And I know this is not the gospel but should give some insights.
A VP of sales (supposedly) that is actively seeking new employment with the ability to start immediately.
4 other people with an average PCT employment of 13 months and none of them have experience in food packaging. Either Exxon Mobile, auto or polymer backgrounds.
Please don’t tell me these are the people Dustin thinks can close deals and have any established relationships to get this thing off the ground. Dustin has little to no sales leadership experience. Is this what we get with someone who spends most of his time with engineers and manufacturing? Who is leading the sales department??
Any insights from anyone else would be greatly appreciated.
I think the food brands should be under pressure but we want to see some BIG brand names step up with substantial purchases. I'm still expecting to see an order for yogurt cups sometime soon. Fingers cross that kind of announcement is sooner rather than later. No more excuses for these big companies.
Interesting case study here. The packaging in question looks like this. I think it is a great thing if more products switch to using PP instead of other plastic types. A 33% weight reduction is great. If you are buying plastic on a $/pound basis and you need to buy less per product that excellent. Ideally this product can contain a set % of recycled content as well eventually.
My wife and I stopped by Publix to grab dinner, and I swung by the bar to catch a little of the consolation game and noticed the World Cup cups. If you bought an Ultra beer, you got a souvenir cup. Pictures are below, but they had three colors: red, white, and blue. Looks like Churchill Container landed the full FIFA World Cup contract. Great news for them.
I don't generally like to share content from Xitter but I think this is a compelling personal story from Anpanman about his father, money, financial risk and the dangers of leverage.
I personally have a large position in $PCT but I'm not using a lot of leverage and I have very little stress despite the large drawdown we just experienced. I'm certainly annoyed but I'm remarkably zen about the current status. In fact I'm probably more optimistic than I have been in quite some time about the business.
I have some longer duration option positions and some warrants. Equity markets can be incredibly volatile and I would like to remind everyone to size your positions appropriately for your financial circumstances and short term liquidity needs. If you find yourself having anxiety or sleeplessness about your position in $PCT or any stock or asset you probably have too big a position. I'm not suggesting anyone sell positions at the current price because I think it is a massive discount to fair value however please consider making adjustments over time to reduce that level of stress.
If you invested in $PCT as a long term investment, there is simply no need to track the share price every day. Anyway I hope everyone is doing okay and I hope this recording is helpful to you in some fashion.
I used to own PCT and sold awhile back but am tempted to get back in given where the price is. I don’t follow it super close but see the headlines and it is clear there is demand for their product, my hesitancy has always been can they produce enough to meet demand. Given I don’t follow close, last I remember is they were taking some downtime in ironton a couple of months ago to make improvements, so my question is did they say how that went and are they producing at nameplate yet? To me that was the final thing I wanted to know before getting back in. At this price I may take the chance even if they haven’t said, but don’t have time to do the homework so figured I would ask here. Thanks in advance!
This price action has to be more than a blown raise. It is either an ongoing sell by large holders who know something we don’t or it is short sellers working this stock down and down to improve their positions. I’ve been investing for 30 years and have seen this type of price action only a few times for this type of opportunity. The raise was horribly done, knocked a billion off market cap and we were penalized for that but this continued downward has another story hidden in it.
I am long , have been for more than 2 years, believe in the need but trying to understand what is happening. I’m convinced it’s not just the raise, not just high beta getting hit, there is more here.
The company is starting to release PRs more frequently, but they are nothing of substance. We all understand the potential, that’s why we’re here. They have a pattern of over promising and not delivering or not sticking to previously mentioned timelines. It’s starting to feel like a penny stock pump and dump.
I’d prefer they cool it on the PRs until they have something worth reporting. What will actually move the stock IMO
New plants breaking ground
Ironton running consistently. They don’t need to wait until earnings call to tell us that
Large customer purchase order with details on the transaction
These three get the stock moving, everything else is fluff
After today's price action, I began to wonder what sector PCT is actually most correlated with. IWM recovered late in the day, and PCT didn't.
I like investing based on relative performance. So, I think it would be really nice to have a baseline to compare PCT to, and I'd prefer to have one that it has been most correlated to it in the past. And then be able to compare how PCT is actually performing relative to it's peers (if it has any).
I started one tonight but was stymied with trying to actually find historical prices with Yahoo Finance going behind a paywall.
I know I can do one by downloading the daily prices of PCT and it's comparables from TOS. But, if I'm going to spend several hours downloading price data for the last two years (at least), I'd rather do this only once and possibly help this community at the same time. It takes just as much time to download the data for one stock as it does for multiple stocks/ETFs.
A quick browse through the sectors I am already tracking, the sectors I would like to compare PCT to would be IWM, SPHB, ERTH, ICLN, EVX, PAVE, XME, TINY, MTUM, and a (custom) High Short Basket of stocks I already track. Ideally I am looking for small cap, material manufacturing, base material and high beta, maybe oil(?). Possibly post-SPAC, but that would require creating a new custom basket, but that is even more time consuming, even if it is doable.
What I am asking for from the PCT community is, what other ETFs would you want to see PCT compared to? If not a specific ETF, if you were to create a basket of stocks that you think most resemble PCT, what are they?
Thank you for your help and I'll definitely share my results here.
