XL Fleet Corp (XL) agreed to settle 19.5 million with investors to end claims related to overstating its financial success in the SPAC deal.
Back in 2021, Muddy Waters Research reported that XL Fleet exaggerated its expected sales by including inactive customers and overstated the performance of its hybrid and plug-in hybrid electric drive systems. Following this, $XL significantly fell, and XL Fleet faced a lawsuit from investors.
On December 22, 2020: XL Hybrids and Pivotal merged and formed XL Fleet.
On March 3, 2021: Muddy Waters Research published a report titled “XL Fleet: More SPAC Trash”.
On March 5, 2021: Following this report, $XL fell by 19.4%.
On March 8, 2021: The $XL stockholder sued XL Fleet for overstating its financial success in the SPAC deal.
On December 22, 2020, XL Hybrids and Pivotal merged and formed XL Fleet. The company stated that “due to strong year-to-date results, XL remains on track to deliver on its full year 2020 revenue forecast of approximately $21 million” expecting a “revenue forecast of $75 million for the fiscal year 2021”.
The company also highlighted its growing number of customers and partners, and that “XL Fleet’s hybrid electric drive system has been proven to significantly improve fuel economy while reducing greenhouse gas emissions”.
Despite these claims, on March 3, 2021, Muddy Waters Research reported that XL Fleet overstated its expected sales, reporting inactive customers and overstating how well its hybrid and plug-in hybrid systems worked.
Muddy Waters reported that these systems often provided only 5-10% fuel savings instead of the claimed 25-50% and faced significant performance and regulatory issues.
According to the report, XL has “weak technology” and future class uplifts are not guaranteed because the task is “too technologically complex for XL engineers to deliver on the promised timeline.”
Following this report, on March 5, $XL dropped by 19.4%.
On March 8, 2021, stockholders sued XL Fleet and its executives, claiming they misled investors about the company's actual technology and business situation to get the merger approved.
What can investors expect now?
XL Fleet Corp (XL) agreed to settle 19.5 million with investors to end claims related to overstating its financial success in the SPAC deal.
If you were damaged due to this situation, you can file for a payout and get your share of the settlement. You can check if you are eligible and other details in the FAQ section below.