Hyliion Holding Corp - Another Low Emissions Truck Manufacturer Starts Trading

11/12/20 04:33:14 PM

by Matt Blackman

The company entered an increasingly crowded space using different technology. Can it survive?

Security: HYLN
Position: N/A

Touted as "an industry leader in Class 8 electrification", Hyliion has a goal to provide technology solutions to transform transportation environmental impact, according to its website. It hit the NYSE and will compete against low emissions tractor and truck makers Nikola (NKLA) and Tesla (TSLA).

HYLN began trading under its new symbol October 2 after merging with Tortoise Acquisition Corp, which traded under the symbol SHLL. Hyliion plans, at least initially, to power its trucks using renewable natural gas as opposed to hydrogen and electricity (NKLA) or battery electric systems (TSLA).

Figure 1. Daily chart of HYLN showing the painful transition following the merger and new symbol (green arrow) through the last trading day of October together with its industry (Conglomerates) in purple.

Graphic provided by: Freestockcharts.com.

However, its first trading month was anything but auspicious. With an initial maximum offer price of $23.28 according to its prospectus, it opened at $40.00 October 2, and after initially surging on its second day, began its descent. By the end of October it had lost more than 50% (see Figure 1). Over the same period, TSLA lost 8% and NKLA shed 24%.

According to its corporate presentation (see article link below), Hyliion Hybrid Electric tractors are available today; it claims to have pre-orders for 1,000 of its Hypertruck ERX from Agility (anticipated first deliveries in 2022) and boasts a potential market size of $800 billion for replacement vehicles. Its competitive edge is that it can convert any Class 8 vehicle from any manufacturer at a "lower total cost of ownership" than the competition according to the company.

Fundamentally, Hyliion shows an operating loss of $2.2 million before depreciation (EBIT) on total assets of $237 million.

Figure 2. HYLN performance compared to Tesla (TSLA) and Nikola (NKLA).

Graphic provided by: Freestockcharts.com.

As of the end of October, the stock was a sell with the price falling more than 6% on the last trading day of the month. However, it was falling on declining volume in the last week which could be bullish, especially if markets begin to recover into year end.

Although it shows some promise on vehicle cost, pre-orders and delivery timelines, HYLN still must be considered a development stage company in an increasingly competitive market at this point and could continue to be volatile as it ramps up production. HYLN is highly speculative at this point so best to trade carefully with a written trading plan and firm stop losses when it does eventually generate technical buying signals or a potential short squeeze.

Matt Blackman

Matt Blackman is a full-time technical and financial writer and trader. He produces corporate and financial newsletters, and assists clients in getting published in the mainstream media. Matt has earned the Chartered Market Technician (CMT) designation. Follow Matt on Twitter at www.twitter.com/RatioTrade

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Hyliion Holding Corp - Another Low Emissions Truck Manufacturer Starts Trading

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