Eos Energy stock falls after Fuzzy Panda issues short report

Investing.com -- Eos Energy Enterprises (NASDAQ:EOSE) stock fell 8% after short-seller Fuzzy Panda Research released a scathing report alleging the battery manufacturer has concealed safety issues and presented misleading financial information to the Department of Energy.

The report claims Eos has hidden multiple instances of thermal events resulting in leaks of hydrogen bromide gas, which Fuzzy Panda describes as "deadly." According to the short-seller, former executives revealed the company maintains three different sets of financial projections that vary significantly depending on the audience.

Most damaging to Eos’s prospects, Fuzzy Panda alleges the company provided "false and misleading" financial projections to the DOE to secure loan approval. The report suggests this could constitute a default on loan covenants, potentially forcing immediate repayment of approximately $90.9 million in debt, representing about half of the company’s cash reserves.

The short-seller also questions the validity of Eos’s order backlog, claiming approximately 80% is "largely worthless" based on interviews with former executives and documentation showing several major projects are inactive or canceled. Fuzzy Panda highlighted specific customers including Pine Gate, which reportedly experienced significant performance issues and "will not buy from Eos again."

The report further alleges Eos batteries are fundamentally uneconomic, with material costs exceeding selling prices even at scale, making profitability impossible despite management’s projections.

Fuzzy Panda concluded by stating it has shared its research with the DOE, drawing parallels to American Battery Technology Company, which recently had its DOE grant pulled and subsequently saw its stock decline approximately 50%.

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