Shares of York Space Systems dropped in excess of 10% on Monday morning following a short position announcement from Wolfpack Research. The short seller said that the company’s main revenue driver has been removed, and investors responded swiftly.
Wolfpack Research reported that 96% of York’s 2025 revenue was tied to sales of satellites to the Pentagon’s Space Development Agency, commonly referred to as the SDA. According to Wolfpack, the Pentagon has moved to dissolve the SDA and has eliminated future funding for the SDA’s Tranche 3 Transport Layer.
The firm argued that York’s January initial public offering assumed continued growth as a supplier to the SDA Transport Layer program. Wolfpack said the Transport Layer program is being replaced by the Space Data Network, or SDN, and cited public Pentagon budget documents dated April 28 that name SpaceX’s Starshield as the provider for the SDN backbone.
Wolfpack pointed to the Pentagon budget documents known as J-Books, saying those files indicate SpaceX is listed as the incumbent provider for the SDN backbone in the fiscal year 2027 budget and that there is no competitive solicitation listed for a second satellite vendor.
York has historically relied heavily on the SDA. Company disclosures indicate the SDA accounted for over 90% of annual revenue, with York’s principal program focused on selling Transport Layer satellites to the SDA’s Proliferated Warfighter Space Architecture program. York has described itself as the largest awardee by satellite volume for Tranches 0, 1, and 2, which the company said helped drive a 52% year-over-year revenue gain.
After the company’s most recent earnings call but before the Pentagon’s announcement, York’s chief executive publicly denied that the Transport Layer program was being terminated. York is scheduled to host its next earnings call on Wednesday.
Wolfpack Research said it interviewed multiple former employees who leveled several criticisms at York. Those former staffers told Wolfpack the company misled the SDA to win contracts, took shortcuts in production, and delivered satellites whose mission-critical software was incomplete, the short seller said.
The short seller’s assertions and the Pentagon budget language together underpin Wolfpack’s decision to take a short position and are cited as the proximate cause of Monday’s share price move.
Market context
The developments center on defense and aerospace contracting, procurement decisions reflected in Pentagon budget documents, and York’s revenue concentration. Investors will be watching the company’s scheduled earnings call for management’s response to the short seller’s claims and the Pentagon’s budgeting actions.