Hyliion Holdings Corp. saw its stock decline 13.5% on Tuesday after Pelican Way Research released a short report that casts doubt on a customer agreement central to recent investor enthusiasm. The short seller announced a short position and questioned the validity of a letter of intent it says was responsible for the shares rallying by roughly 150%.
Pelican Way’s report focuses on an LOI with VFG Holdings for 250 KARNO cores, which it values at about $133 million. The firm states that "the ~$133mm LOI with VFG Holdings, which had sent the stock up ~150%+, is misrepresented and that VFG is seemingly unable to support an order of that size."
The short seller provides a description of VFG Tech Holdings, LLC, noting the entity was registered in January 2026 and, based on LinkedIn records cited by Pelican Way, appears to have only four employees. Pelican Way also reports that the company website contains only two pages and does not list a physical address. The report further observes that VFG’s founder, Jason Green, concurrently operates another company called Artificial By Design, according to the short seller’s findings.
Pelican Way highlights the materiality of the disputed LOI to Hyliion’s reported business development. The firm says the agreement represents roughly 33% of the approximately $400 million pipeline Hyliion disclosed during its first quarter 2026 earnings release on May 13.
Hyliion’s recent financials and corporate history are also noted in the report. The company posted $3.5 million in revenue for fiscal year 2025 and reported a net loss of about $57.2 million. Pelican Way reminds readers that Hyliion acquired the KARNO Power Module technology from GE in 2022 for roughly $37 million.
In addition to the VFG-related allegations, Pelican Way calls attention to Hyliion’s prior strategic shifts. The company went public via a SPAC in 2020 as an electric truck business but, following a strategic review, abandoned that strategy in 2023, the short seller points out.
Key takeaways
- Pelican Way Research announced a short position and questioned a $133 million LOI with VFG for 250 KARNO cores.
- The LOI in question is said to constitute about 33% of Hyliion’s reported $400 million pipeline disclosed on May 13, 2026.
- Hyliion’s most recent fiscal results show $3.5 million in revenue for 2025 and a net loss near $57.2 million.
Risks and uncertainties
- Verification risk - The short seller asserts that the VFG LOI may be misrepresented and raises questions about VFG’s ability to support an order of the size stated.
- Concentration risk - If the LOI is central to Hyliion’s reported pipeline, issues with that agreement could materially affect perceived future revenue streams.
- Execution and strategic risk - The company’s prior pivot away from its original electric truck strategy is cited as context for shifts in business focus.
This episode has prompted selling pressure on Hyliion’s stock as market participants digest the short seller’s claims and the implications for the company’s reported pipeline and revenue prospects. The facts presented in Pelican Way’s report - including VFG’s registration date, reported employee count, website characteristics, and the involvement of an associated founder - form the core of the allegations that triggered the market reaction.
Hyliion’s acquisition history for the KARNO Power Module and its fiscal 2025 results remain part of the public record referenced in the short report, as does the timing of the $400 million pipeline disclosure on May 13, 2026. The situation highlights the potential market sensitivity to customer relationships and the documentation supporting sales pipelines.