What happened

Before the start of today's trading session, the market had pumped the brakes on buying shares of Hyzon Motors (HYZN -1.36%) in December. Shares had plunged 14%. Today, however, investors are seeing a bright green flag for the developer of hydrogen-powered vehicles.

Partnering with Chevron, the company announced an investment in Raven SR. As of 11:42 a.m. ET, shares of Hyzon are up 18.6%.

So what

In a regulatory filing made public yesterday, Hyzon reported that Hyzon Zero Carbon, a subsidiary of Hyzon, had entered into an agreement with Chevron New Energies, a division of Chevron, to invest in Raven SR S1 LLC, a subsidiary of Raven. In addition to the development and construction, Raven SR S1 LLC will operate and maintain a solid waste-to-hydrogen generation production facility in Richmond, California.

According to the terms of the agreement, Hyzon will provide an investment of $10 million and receive an equity stake of about 20% in the LLC. Hyzon provided $8.5 million at the closing of the transaction on Dec. 21, and it expects to provide the additional $1.5 million in 2023.

Raven SR designs systems that transform various feedstocks -- biomass, sewage, mixed municipal solid waste -- into renewable fuels.

Now what

There hasn't been a lot to celebrate with Hyzon in 2022; for example, in August, Hyzon reported that it had found revenue recognition irregularities. The company hasn't reported quarterly earnings since the first quarter of 2022.

While the market is interpreting today's announcement as an encouraging sign that the company is pursuing growth opportunities, its murky financial situation suggests that only investors with a considerable tolerance for risk should consider powering their portfolios with this hydrogen stock right now.