Detecting Negative News Hidden in Plain Sight

Ticker: LOOP US

​Executive Summary

  • Generally, markets reward positive news about companies. As a result, there are tangible benefits for companies to grandstand positive news and bury negative ones, where possible

  • In this case study, we applied the Keywords Map on Loop Industries, where we picked up subtle, yet critical information that was previously missed by the broader investment community.

  • The Keywords Map compares between two annual reports and highlights information that has been newly added or removed in the latest annual report


  • Having to abide by regulatory requirements, annual reports are a treasure trove of information. Content that has been added or removed from an annual report is not done without purpose or reason.

  • Yet, inundated with information, going through an annual report year after year is a luxury for many investors

  • The result is missing subtle, yet important information not covered by press releases, earnings calls, and sell/buy-side research, among others.


  • The Keywords Map compares between two annual reports and outputs the keywords that changed – Blue for new keywords added, and Red for old keywords removed. It is categorized by the section (ie., Risk, Business Overview) that the word appeared in, and you can mouse over the word to view the sentences containing it. The size of each box represents the word’s relative weight in frequency terms. 

  • Below, we go through a case study on Loop Industries (LOOP US) using the Keywords Map. This is not an investment view on LOOP, but rather, showcasing how the removal/addition of certain content in an annual report reveals information that management is not forthcoming in disclosing, but yet required to do so under regulatory requirements.

Let’s explore the Keywords Map below. (Please use a desktop for viewing as certain features are not available on mobile devices)

Notable removals of keywords:

1. Thyssenkrupp Industrial Solutions (“tkIS”) and the related Waste-to-Resin (“WtR”) solutions

  • Loop removed all mentions of tkIS and WtR solutions in their most recent annual filing.

  • This is material. Per the sentences that the two terms appeared in, “WtR is a key pillar of their commercialization blueprint”, and that tkIS is a “key partner” that is “perfectly positioned to help them commercialize their WtR solution”

  • There was no announcement relating to this prior to the annual report.

  • As it turns out, the partnership with Thyssenkrupp is on “indefinite hold”, according to the short activist Hindenburg Research in their short exposition involving the interview of various parties involved in the partnership.

  • The short report disclosing this information was made in October 2020. Yet, this information, though not explicitly announced by the management, was already present (due to its removal) in the annual report made public in May 2020 – per the Keywords Map.

  • The management of LOOP did not wish to highlight the negative news. But due to regulatory requirements, they had to alter the content in their annual report to reflect the facts on the ground. 

2. Gatorade and Drinkfinity (subsidiaries of PepsiCo)

  • Loop removed all mentions of Gatorade and Drinkfinity

  • Previously, Loop disclosed partnerships with Gatorade and Drinkfinity where their customers mail their used pods back to Loop, who in turn process the used pods into PET plastic resin and polyester fibre.

  • Hindenburg spoke with former employees, who shared that the partnership is questionable given that Loop’s technology is essentially not able to recycle the pods, nor the packaging provided to customers to return the pods in. Hindenburg questioned the longevity of this partnership.

  • Similar to the previous point, this disclosure pertaining to Gatorade and Drinkfinity was already apparent (through its absence) in Loop’s annual report in May 2020.

  • With regard to negative disclosures, we again observe the pattern of management abiding by mandatory disclosure requirements but yet not highlighting its fact.

3. Drinkworks:

  • Loop removed all mentions of Drinkworks

  • The partnership is similar in nature to the one signed with Gatorade/Drinkfinity, where used pods are returned to and recycled by Loop.

  • To date, there has been no mention of the discontinuing of this program by Loop or the general investment community.


Notable addition of keywords:

4. Infinite Loop:


  • At first sight, the term seems like a significant addition given the frequency of its occurrence. However, on further reading, “infinite loop” seems to be an abstract and non-specific term used to fill the gap where there were previous mentions of WtR and Thyssenkrupp.

The Keywords Map, if reviewed by investors following the filing of LOOP’s annual report in May 2020, would have highlighted pertinent issues to be clarified with the management of LOOP. Even today, findings of the Keywords Map complement and adds weight to some of the key points put forward by Hindenburg Research.

Following the above events, Loop recently received a subpoena from the SEC (“Securities Exchange Commission”) and is currently under investigation with regard to matters relating to its technological claims and partnership agreements.


  • The Keywords Map is meant to augment existing workflow and increase the efficacy of the investment process.

  • If you enjoy reading annual reports, the Keywords Map ensures minute details are not missed. If reading annual reports has not been part of your investment process due to time constraints, the Keywords Map provides a clear highlight of key issues at a glance.

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