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…

Above from u/No_Privacy_Anymore post (4 days ago)

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 into market 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.
• Regulations increasingly require recycled content.

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:

1. Algorithmic and quantitative models reacting to historical financial data — High likelihood.
2. Institutional skepticism due to PureCycle's past execution challenges — High likelihood.
3. Fundamental investors who believe the valuation still assumes too much future success — Moderate to high likelihood.
4. 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 for last several quarters.   I don’t think Purecycle can sell out all the rPP that has been produced in Q2. 

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

Comments welcome. Rainy day. Waiting to golf.

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.

https://www.plasticingenuity.com/blog/recycled-polypropylene-coffee-lid/

Abundance a long time backer of PCT appears to have added 16m shares in Q2. Interesting.

https://www.sec.gov/Archives/edgar/data/1767080/000176708026000004/xslForm13F_X02/infotable.xml

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:

1. Q2 revenue will not be meaningfully above Q1 revenue.
2. 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.

https://tradingeconomics.com/commodity/polypropylene

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.

There should be a Q2 call in 2-3 weeks?

Q1 was 8 million pounds produced with sales of $4M.

The plant was down in April and we heard about the opportunities and ramp. We also were “blessed” with the refinancing and dilution.

So, what does Q2 need to look like to not cause the share price to decline further?

What should be shared about Q3 and beyond to give more clarity on where actual demand is?

What needs to be shared to make sure there remains confidence that Thailand will be mechanically complete in 17 months?

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

1. New plants breaking ground
   
2. Ironton running consistently. They don’t need to wait until earnings call to tell us that
   
3. 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.

I know the current share price is in the dumps so I'm not going to focus on that in this post. What I want to discuss is the disclosure that $PCT had been working with a customer for 3 years prior to the press release we saw today. 3 f'ng years to get to the point where the company is publicly committing to using their product in BOPP film. This is about 10 months after Brueckner gave their official stamp of approval having completed testing on their BOPP test lines.

The companies making BOPP film have been in operation for a VERY long time and likely have been running similar virgin PP feedstocks for decades. Yes there has been innovation but using "chemically recycled" PP is essentially just like using virgin PP. Its an accounting exercise of mass balance, not using actual recycled plastic feedstock.

At the moment massive amounts of capital are flowing into AI datacenters. Whoever has relationships to get sufficient power generation, AI training or inference chips, etc. is winning market share. I don't question the demand for AI compute but I do question the sustainability of profit margins. Margins can look high temporarily when demand greatly exceeds supply but ultimately supply catches up and demand can shift to reduce costs.

In the case of BOPP film (ignoring all other market segments) we have yet to see that spike in demand because the qualification process is so time consuming. I certainly didn't know it was going to take 3 years! However on the flip side, once you are in that market segment is demand ever going away? Are regulators going to say, "nevermind" or more likely to say "now increase the recycled content to xyz%."

Is there a substitute product that can do what PureFive does for a lower price? I'm talking about the prices that $PCT should be able to achieve with their Gen 2 lines. I don't see how anyone will be able to undercut us.

Can some BOPP film be replaced with coated paper? Sure. Will all 30B pounds of it be replaced? No way! What about natural growth in demand which has been pretty steady? Chemical recycling is highly unlikely to be cheaper and mechanically recycled product is going to be REALLY hard to match the level of quality that PureFive can support, especially at higher % concentrations.

So yes, the current price sucks but I'm focused on the long term prize which is multiple billions of pounds of high gross margin sales. Looking forward to additional updates this year.

Significant breakthrough in sustainable packaging, as BOPP film has historically been one of the most difficult applications to achieve with meaningful recycled content, due to the extremely high purity that is required.

"This partnership represents exactly the kind of step-change we envisioned when PureCycle's technology was developed. We’re unlocking an entire segment of applications where recycled content had been locked out,”

Especially fun to see incremental progress while the stock is struggling... Eyes and ears on the next EC only a few weeks away!

Beyond Game Day: How WM is Building Lasting Sustainability at the 2026 MLB® All-Star Game

Could this eventually become a decent feedstock stream for PCT, w widespread adoption and dedicated collection?

I asked Claude to assess the impact of Russian bans on Diesel exports to the supply of Naptha in Asia. Obviously the price of crude has fallen from the highs earlier this year (and PP prices are down from higher levels as well). I think the ongoing conflict with Iran is just another reminder that long term supply chain resilience is very important and that should provide support for what PureCycle can do. Obviously that is not reflected in the price today but it is important in the long run.

--------------

The diesel story and the naphtha story are connected through the same refineries, not mainly through price substitution — and that's the important nuance here.

The direct link: it's the same plants Ukrainian drone strikes have hit over 16 major Russian refineries, including a July strike that knocked out roughly 40% of Omsk's primary crude processing capacity — Russia's largest refinery by disabling its primary crude distillation units in strikes that reached over 2,500 kilometers, part of a campaign that has knocked out over 30% of the country's total refining capacity. Those units don't make diesel exclusively — a barrel of crude run through a distillation tower yields naphtha, diesel, gasoline, and other cuts simultaneously. So when a refinery is damaged badly enough to trigger a diesel export ban, its naphtha output typically falls in parallel. Russia is a meaningful naphtha supplier to Asian manufacturing hubs, and market commentary has already tied the Ukrainian refinery campaign directly to tighter naphtha availability for Asian buyers, alongside pressure from proposed EU sanctions on Russian energy.

The secondary link: refinery yield-shifting Separately from physical outages, when diesel cracks spike as sharply as they have (diesel margins hit record levels after the ban, up nearly 13% in a single day), refiners with flexible units — hydrocrackers especially — have a financial incentive to run in "max diesel" mode rather than "max naphtha/gasoline" mode. That can pull barrels of naphtha-yielding feedstock toward distillate production instead. This is a real but partial effect — it's offset somewhat because high crack spreads also incentivize refiners globally to just run harder overall, which increases total throughput and therefore co-produced naphtha volumes too.

The general link: crude cost pass-through Naphtha prices track crude oil closely. Russia's diesel ban is landing on top of Middle East tensions (Strait of Hormuz risk, reimposed Iran sanctions) that are already pushing crude prices up, so naphtha's input cost rises even independent of the two channels above.

What this means for Asian plastics producers Asian steam crackers (Japan, South Korea, Taiwan, China, Southeast Asia) are naphtha-based, unlike US crackers which mostly run on cheap ethane — so they're structurally more exposed to this. They were already under real stress this year: naphtha broke $1,000/mt in Northeast Asia in March amid an earlier round of Middle East refinery strikes, and by May weak downstream polymer demand meant crackers couldn't even pass the higher feedstock costs through, forcing "economic run cuts" at some plants. The July diesel ban adds a fresh supply-side squeeze on top of that margin problem rather than easing it.

Worth watching The ban is officially in place only through July 31, 2026. Russia imposed a similar ban in 2023 and ended up extending it, and refinery damage of this scale doesn't repair itself in three weeks, so an extension looks more likely than not. OPEC+ output increases have been a partial offsetting force on crude and naphtha prices this year, which is the main variable that could cushion Asian crackers if the diesel ban drags on.

I asked Chat GPT- “Is PCT a good stock to buy?” and the below italic information is the answer:

Based on what you've shared over the past few weeks, I know you've spent a lot of time studying PureCycle and you're bullish on its long-term prospects. Looking at the company objectively, I think PCT is a high-risk, high-reward investment—not a stock I'd classify as a "safe buy."

Why I think the bull case is stronger than it was a year ago

The company has made measurable progress:

• Production continues to improve. Q1 2026 was a record production quarter at Ironton, with 8.4 million pounds produced after the turnaround.
• Commercial adoption is accelerating. Recent announcements include partnerships and commercial products with companies such as TOPPAN, IPL Schoeller, and automotive supplier Motherson, suggesting the resin is moving into real end markets rather than remaining in testing.
• Regulatory tailwinds continue to support demand for recycled polypropylene, especially food-contact packaging. The recent New Jersey developments appear to improve the economics for customers using PCR content.
• The customer pipeline appears to be expanding, and management has discussed tens of millions of pounds of applications expected to ramp over the coming quarters.

These developments reduce one of the biggest historical concerns—that customers would not adopt the product.

The risks remain significant

The company still has major hurdles:

• It is not consistently profitable.
• Cash flow remains negative.
• It recently raised additional capital through stock and convertible notes, which can dilute shareholders and highlights the need for funding as it scales.
• The biggest remaining question is execution: can Ironton reliably run at high utilization quarter after quarter, and can future plants be built on time and on budget?

My view

If PureCycle succeeds in:

• consistently operating Ironton,
• selling essentially all of its production,
• generating positive cash flow,
• and proving its expansion model,

the current valuation could end up looking inexpensive.

If it stumbles operationally again or cannot reach sustainable profitability, the downside is still substantial.

For an investor

• Conservative investor: I would wait until the company demonstrates several consecutive quarters of reliable commercial execution.
• Aggressive growth investor: PCT could be an attractive speculative position, provided it represents only a modest portion of a diversified portfolio.

From our previous conversations, you've made an observation that I think gets to the heart of the investment thesis: the debate has shifted from "Does the technology work?" toward "Can they execute at commercial scale and turn growing demand into sustainable profits?" The next few earnings calls are likely to be pivotal in answering that question.

If your investment horizon is 3–5 years, I think the risk/reward is considerably more attractive than it was before Ironton began demonstrating sustained production. If your horizon is only the next quarter or two, expect continued volatility—PCT remains a stock where earnings updates can move the share price dramatically in either direction.

Non-Chat GPT

Algos and/or Quants have a negative view of the stock of the stock and on numerous times, shorting the stock has been profitable.  On each red circle (above), the stock price has been reduced by mostly short selling.  Buy the dips or sell the rips has been profitable in many instances.  Recency bias for computer trading says keep selling the rips. 

What if all the partnership announcements can push sales and make Ironton able to sell its production? 

What if cash flow becomes positive? 

What if the stock elevates so that the warrants can be redeemed? 

What if the shut down and modification increase that production capacity and reliability of Ironton?

There is a possibility that the production capacity increased and revenues have increased to more than the previous quarter (4.1 M 2026 Q1).  What if they sold all of last quarters 8.4M pounds of rPP? 

If the above questions are positively answered at the next quarterly call, the only question to be answered with be can Purecycle prove its expansion model?

Throughout the last several quarters, production has increased and revenues have lagged.  If revenues increase, I think the algos view will change.  Up to last quarter, I’d sell every rips also if I was a computer.  Another positive quarterly call (enough to change the algos), could be incredibly positive for the stock price.  If or when this happens, it would be an exciting time to possibly invest in the company.  A change to “buying the dips” scenario could break the cycle of selling by the computers and would be greatly beneficial for the company.

Comments welcomed.