What happened
Shares of truck electrification company Hyliion Holdings (HYLN -3.79%) soared more than 30% Thursday after the company announced more efficient, higher performance battery technology for battery-electric semi trucks.
Investors cheered the next-generation batteries, but some of those gains disappeared as shares were down 11.4% as of 1:40 p.m. EST on Friday.
So what
Hyliion's redesigned battery module "features advanced cooling technology to enable longer battery life, higher charging rates and improved safety," according to a statement from the company.
But today, investors may be wondering if the news was worth the $800 million increase in market capitalization it prompted yesterday.
Hyliion battery module. Image source: Hyliion Holdings.
Now what
Hyliion became publicly listed on Oct. 1, 2020, after completing a merger with a special purpose acquisition company. The company is working toward commercializing its Hypertruck ERX and hybrid electrification systems for class 8 semi trucks.
It plans a net-carbon-negative product using renewable natural gas to fuel a generator that charges its battery-powered drivetrains. The company believes there is a market opportunity worth about $800 billion for semi truck conversions.
The news of a next-generation battery system seems to show progress for the company. But until that translates to a leading market position, the kind of valuation bump the stock realized yesterday may have some investors wondering if it was too sharp a move.
Investors should look for an update on the company's business fundamentals when it reports earnings on Feb. 23 to see if the long-term strategic plan is closer to panning out.
