What happened 

Shares of fuel cell company Ballard Power Systems Inc. (NASDAQ:BLDP) plunged as much as 15.8% late Thursday after a short-seller attacked the stock. At 3:15 p.m. EST, shares were still near their daily low, down 15%. 

So what

Hedge fund Spruce Point Capital Management released research via a press release and an article on Seeking Alpha laying out its short case for the stock. Short-sellers often publicize a position they have in a stock in hopes the market will react. Today, the strategy seems to have worked. 

Battery shape made from leaves, with hydrogen molecular formula and other energy symbols around it.

Image source: Getty Images.

Spruce Point thinks Ballard's Chinese partnerships won't live up to expectations. The research report argues, for the most part, that the fuel cell market isn't all it's cracked up to be in China, and that as a result there'd be very few long-term wins for joint ventures there. 

Now what

This assertion needs to be taken with a grain of salt because Spruce Point has a vested interest in the market pushing the stock lower. With that said, Ballard has been losing money for years, and even with growth in 2017, it hasn't proven that it can make a profit over the long term. 

As a rule, I would be skeptical of a short-seller's story, but it's worth considering the financial risk Ballard presents before turning bullish on the stock. If growth opportunities don't develop further, the company could be in real trouble. That's the reason I'm staying out of (but not shorting) the stock today. 

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.