An Imaginary Pot of Gold

Carson Block of Muddy Waters Capital makes the case that the value proposition at Sunrun (RUN) is built on a foundation of dubious modeling. Core to its thesis, Muddy Waters believes that RUN vastly overstates its net earnings assets which is not only key to the equity valuation but underpins its financing through the asset-backed securities (ABS) market. Presenting further risk to ABS holders and sources of growth financing is Muddy Waters’ belief that the company could be at risk with the IRS for potential tax fraud through the recursive accounting of investment tax credits. In the event that any of its shaky valuation pillars begins to crumble, the company could be left with a massive funding gap that would require additional equity issuance and/or possible bankruptcy. For more information, visit muddywatersresearch.com