The Biden administration misled investors by prematurely announcing a massive $200 million grant to a lithium battery-maker that has since been revoked, leading to drastic fluctuations in the company's stock price based on false information, according to the top Republican on the Senate Energy Committee.
The White House and the Department of Energy framed the funding for Microvast as a done deal in press releases last October, but officials later said the companies were still being vetted after the Washington Free Beacon uncovered the company's extensive ties to China. The administration officially pulled the plug last month on the grant to lithium battery-maker Microvast after facing heat from Congress.
"It is irrefutable the White House and Department of Energy’s deceptive press releases were a major catalyst in misleading investors," said Sen. John Barrasso (R., Wyo.) in a letter to Energy Secretary Jennifer Granholm on Monday. "It is clear that in the minds of investors the Department’s loan to Microvast had been perceived as a guarantee."
Barrasso raised concerns in February that the Biden administration's "misleading" funding announcement led to a surge in Microvast's stock. His latest letter adds that the company's stock also plummeted after the Department of Energy canceled the award, potentially resulting in losses for investors. Barrasso also said that Granholm's agency was "delinquent" in responding to his request in May for more information about its decision to pull the funding.
In the October press release, the White House said, "President Biden is announcing that the Department of Energy is awarding $2.8 billion in grants from the Bipartisan Infrastructure Law to 20 manufacturing and processing companies for projects across 12 states." The DOE similarly released a list of the companies that it said "will receive a combined $2.8 billion."
Microvast’s stock surged 40 percent in a day on the heels of the Biden administration’s funding announcement and dropped 36 percent after the Department of Energy said it was scrapping the award negotiation in May, according to Barrasso.
Barrasso said the October announcement drew interest from investors on online forums such as Reddit, where one wrote, "Bought 300 shares today!" and another said, "17,000,000+ shares of volume in the past 30 minutes. [Microvast] to the moon!"
"It is inappropriate if not unethical that the federal government has played such an outsized role in a single company’s stock price," said Barrasso, adding that the administration’s announcements on the infrastructure funding "created massive fluctuations in financial markets caused by government misinformation."
Barrasso asked Granholm to turn over records related to the department’s award selection process by June 23.
The $200 million award to Microvast came under scrutiny from Congress in December, after the Free Beacon reported that the company operated primarily from China, according to its Securities and Exchange Commission filings. Microvast’s CEO was also recruited to move back to China in 2000 through a Chinese government-sponsored "talent program."
DOE officials told Congress in February that Microvast and the other companies on the list had been selected to participate in award negotiations, but the funding wasn’t finalized yet. The department announced that it had canceled its negotiations with Microvast last month.