Hyliion Holdings Corp. lost 16% of its market value on June 29 after a short-seller report questioned the legitimacy of a $133 million customer agreement. Levi & Korsinsky subsequently launched an investigation into the company's officers and directors, citing a 100% revenue concentration in a single unidentified customer disclosed in Hyliion's Q1 2026 SEC filing.
Hyliion Holdings Corp. lost 16% of its market value on June 29 after a short-seller report challenged a $133 million customer agreement.
"The counterparty appears to lack the financial capacity or structural substance to support an order of this magnitude," Pelican Way Research, the activist short seller, said in its report.
The deal, a letter of intent to sell up to 250 KARNO power generation cores to VFG Tech Holdings, represented roughly one-third of Hyliion's disclosed $400 million sales pipeline. VFG was registered in Delaware on Jan. 5 with no physical address, four employees on LinkedIn and a two-page website, according to the report. Hyliion's Q1 2026 filing showed 100% revenue concentration in a single unidentified customer, even as management touted a pipeline built largely on non-binding arrangements.
The crash puts Hyliion's year-to-date gains at risk after the stock had surged about 215% in 2026. Levi & Korsinsky, a securities litigation firm, said it is investigating whether Hyliion's officers and directors violated federal securities laws.
The short seller also flagged governance concerns. Hyliion generated $8 million in cumulative revenue from fiscal 2021 through fiscal 2025, according to Pelican Way's analysis. Over that same period, Chief Executive Officer Thomas Healy received $15.4 million in total compensation, and combined with $13.5 million paid to other executives, insider compensation exceeded the company's five-year revenue by more than 360%.
Hyliion originally went public in 2020 through a merger with a special purpose acquisition company, projecting 34,500 electric truck units sold and $2 billion in revenue by 2024. The company delivered an estimated 29 trucks over its lifespan and generated less than $1 million in revenue in 2023, the short seller calculated. After abandoning the EV business, Hyliion pivoted to stationary power generation, acquiring the KARNO generator technology from General Electric Co. in 2022 for $37 million — a technology GE sold because there was no external market interest, according to the report.
The company burned about $50 million annually with $139.3 million in current assets as of late March, Pelican Way said, warning that Hyliion may use the recent stock run-up to prepare a share dilution. Hyliion missed its revised fiscal 2025 revenue guidance by more than 65%, bringing in $3.5 million against a net loss of $57.2 million.
The investigation adds further downside risk for a stock that had already lost nearly a fifth of its value in a single session. Hyliion has not yet issued a formal response to the short-seller report or the investigation. Investors will watch for any regulatory filings or shareholder lawsuits in the coming weeks as the probe develops.
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