The Complete Breakdown of IperionX’s 90% Short Sell Report

IperionX Under Fire: The Full Story Behind the 90% Short Call

There are some interesting consensus expectations emerging for IperionX (ASX: IPX). On one side, analysts are projecting strong growth and price momentum, with recent price targets pushing as high as A$9. On the other side, last week Spruce Point Capital Management has released a detailed report that argues for a hard sell on IPX.

Spruce Point is known for identifying companies where they believe there is a material gap between market expectations, management communication and underlying fundamentals. Their latest report outlines a potential 70% to 90% downside. We have linked the research below, and in this section we will break down the key points in a clear and concise way so you can form your own view on the future of IPX.

But why does this matter? Many retail investors hold exposure to the broader additive manufacturing ecosystem through stocks such as Metallium (ASX:MTM), IperionX (ASX:IPX), 3D Metalforge (ASX:3MF) and Titomic (ASX:TTT). All of these companies sit inside a supply chain that promises to reshape downstream processing and metal recycling through more efficient, lower-cost and less waste-intensive technologies compared with traditional methods, such as the Kroll process.

This is an exciting vision, but as always, the investment case comes down to balancing the promise of innovation with the discipline of understanding execution risk, capital needs, customer adoption and long-term viability. Our goal here is to give you a balanced and independent breakdown, so you can decide how much conviction you want to have in this part of the market.

What are the Best Mining ASX Stocks to invest in right now?

Check our buy/sell tips

‘The Core “Short Case” Against HAMR

The first point worth highlighting and arguably the most important pillar of Spruce Point’s short thesis is their concern around HAMR, which is IperionX’s core intellectual property for producing titanium metal. IPX presents HAMR as a next-generation alternative to the seventy-year-old Kroll process, but Spruce Point believes the technology may face the same challenges that have derailed every previous attempt to replace Kroll.

Their report references research from the Journal of The Electrochemical Society, which concludes that the HAMR process is not energy efficient and operates at temperatures between seven hundred and eight hundred degrees C. This directly conflicts with IPX’s claim that HAMR can run below 700 degrees and deliver energy savings of around 50%.

Spruce Point also interviewed several industry experts who raised concerns about the number of steps involved in the HAMR workflow. The more steps you add, the more opportunities there are for process failures, cost creep and inconsistent output. These experts also questioned whether HAMR can realistically deliver the cost advantages and structural efficiencies that IPX promotes, especially when compared with other emerging technologies in the titanium market.

Process inconsistencies and shifting claims

Another point raised by Spruce Point Capital Management is the pattern of changes in IperionX’s public disclosures over recent years. They note shifts in cost assumptions, furnace configurations, throughput expectations and capacity estimates. Some iteration is normal for a new technology, especially in metallurgy, where optimisation is constant. However, Spruce Point argues that the frequency and scale of these changes weaken confidence in the technical readiness of the process and its ability to scale in a predictable way.

What happened to Boeing?

They also point to the decade of development work involving Boeing and Arconic. These were high-quality partners who engaged with the technology early, yet neither chose to license or adopt it. In most development pathways, if a technology proves genuinely transformational, large operators tend to integrate it in some form, especially when the pitch revolves around cost improvements and efficiency. The absence of adoption does not prove the technology is flawed, but it is an interesting data point that investors should take into acount.

The Vanishing Pipeline at IPX: Early Hype vs Current Reality

In addition to this, IPX’s reported pipeline has shifted noticeably over time. In a 2023 quarterly update, the company highlighted a pipeline of around 200 potential customers. By the 2025 annual report, that figure had fallen to 100, a fifty percent decline. The most recent September 2025 quarterly report showed only 22 active engagements. For investors, this trend raises questions about how much of the early commercial interest has translated into real momentum.

Spruce Point also questions why, if the underlying patent portfolio is as revolutionary as presented, it was sold for only US$14 million when the research and development costs cited were around US$12 million. They argue that a fundamentally game-changing process should have attracted premium industry interest or acquisition by established leaders. This is not a definitive conclusion, but it does add another layer of scrutiny around how the market truly values the HAMR technology and why major players did not move first.

Investors’ Takeaway for IPX

For investors following IperionX, there is no denying the potential or the excitement around the story. But it is just as important to step back and understand the risks, so you can make a genuine risk-adjusted decision. IPX is trading at a significant premium, with the stock valued at roughly fifty-seven times forecast revenue for FY26. At that level, a large portion of the future success is already priced in.

If revenue does not materialise as expected, the downside could be meaningful. This is why we think it is worth taking the time to read the full short-side analysis. It does not mean you have to agree with the conclusions, but it gives you a clearer picture of the assumptions the pressure points, and the scenarios that matter most for long-term investors. After all, Doing Your Own Research is as important as ever.