Shares of Hyliion Holdings plunged for a second straight session, trading at $5.55 (down 8.9%) after a 16% collapse the day before, as short-seller Pelican Way Research tore into the company's most important commercial agreement. The firm disclosed a short position and alleged that a $133 million letter of intent with VFG Holdings for 250 power-generation units "is misrepresented and that VFG is seemingly unable to support an order of that size." The two-day rout has erased roughly $300 million in market value and sliced the stock nearly 32% from its June 18 peak of $8.10.

  • The Customer That Barely Exists on Paper. VFG Tech Holdings was registered in Delaware on January 5, 2026, has no listed physical address, just four employees on LinkedIn, a two-page website, and its founder simultaneously runs a separate, unfunded AI infrastructure company. For shareholders, this matters because the VFG deal alone represents roughly one-third of Hyliion's publicized $400 million pipeline — the very number management used to justify the stock's 250% run-up. If VFG can't write a check, a huge chunk of the growth narrative evaporates.

  • Revenue Is Still Tiny While Cash Burns Fast. Hyliion missed its revised fiscal 2025 revenue guidance by more than 65%, bringing in just $3.5 million against a net loss of $57.2 million.

Pelican Way argues the deal was timed to prop up the stock as Hyliion burns approximately $50 million annually with only $139.3 million in current assets. At that rate, the company has roughly three years of runway — unless it raises capital by selling new shares, diluting existing investors.

  • Insiders Have Earned More Than the Business. From FY21 through FY25, Hyliion generated just $8 million in total revenue, while CEO Thomas Healy collected $15.4 million in pay and total insider compensation hit $29 million — over 360% of cumulative sales. That imbalance raises governance questions about who is truly benefiting from the company's operations.

  • The Broader AI-Power Thesis Isn't Dead Yet. Hyliion says it remains on track to deploy about 10 early units in 2026, and it expects $40–$50 million in new U.S. military contracts this year on top of existing Navy work.

But management itself concedes the VFG letter of intent is non-binding and turning it into actual bookings requires signed purchase agreements and successful field deployments.

Hyliion has not yet issued a formal public response to the short report. Until it does, the burden of proof rests squarely on management.