Sunrun (NASDAQ:RUN) shares tumbled more than 7% Wednesday after Muddy Waters revealed that it is short the company's shares again, claiming the solar business "significantly inflates the number of subscribers it reports."
The short seller argues that RUN's financials are a "dumpster fire," adding that the company "relies on government subsidies, ABS issuances, and corporate issuances to operate."
"Sunrun is valued based on an aggregation of 30-year subscriber models with highly aggressive assumptions and inflated Investment Tax Credits," argues Muddy Waters.
In its previous short report on the company, Muddy Waters said it took issue with subscriber value, while in the latest report, it alleges the company reports higher subscriber numbers than the U.S. Energy Information Agency data suggests.
"As of Q2, RUN reported ~725K Subscribers. Data RUN provides to the U.S. Energy Information Agency shows only ~600K Subscribers," the firm said in a tweet.
"Analysis of $RUN balance sheet movements of gross solar assets confirms that RUN Subscriber numbers DO NOT TIE to its GAAP financials. The EIA numbers are a much tighter fit to balance sheet movements," they added.