IperionX Limited ADR (NASDAQ:IPX) shares fell 5.6% in premarket trading Wednesday after Spruce Point Capital Management published a short report on the titanium producer, warning of a potential long-term downside of 70% to 95% under certain conditions.
The New York-based investment firm raised doubts about IperionX’s commercial prospects and valuation in a report titled “A Critical Analysis of Commercial Viability And Valuation Concerns.” While the report acknowledged the company’s experienced leadership and strategic goal to reshore the U.S. titanium supply chain, Spruce Point expressed skepticism about IperionX’s HAMR technology being able to replace the 70-year-old Kroll process, which remains the industry standard.
Spruce Point also cited several red flags, including management overlap with Piedmont Lithium, a company that has previously faced scrutiny from short sellers. The firm pointed to an oversupply in the titanium powder market, with existing capacity reportedly 3.5 times larger than demand.
The report further questioned IperionX’s partnerships and customer announcements, suggesting that many agreements had expired or been dropped from public updates. Although investors have shown enthusiasm for the company’s $11 million contract with Ford slated to begin in 2025, Spruce Point noted that no revenue has yet been recognized and that no inventory was listed on the balance sheet at the close of the fiscal year.
Additionally, the short seller claimed to have found potential inconsistencies in IperionX’s financial disclosures, pointing to issues related to Titan project acreage, capital spending, G&A costs, and employee figures. A reported site visit to IperionX’s U.S. headquarters revealed what Spruce Point described as “an empty office with stacked boxes, mail on the ground, and outdated investor materials.”
IperionX, which has undergone two name changes — from TAO Commodities to Hyperion Metals and now its current identity — currently holds a market capitalization of about $1.2 billion. According to Spruce Point, the stock trades at 9.7x book value and 24x projected 2026 revenues, far above the specialty metals industry median of 1.4x and 1.8x, respectively.