Thread by @EggPlatypus

1/12 Bear thread: $HLGN is a VC cashout that is likely going to $5.

$HLGN has been touted as low float bc the post-redemption trust is just 2.3m shares...

However, true float is 2000%+ higher! At least 45.8m shares unlocked on Fri and will prob start getting dumped this week

2/12 Are these shares already registered?

Yes. In the $HLGN S-4/A, a total of 202.5m shares were registered prior to merger. Tables from that filing show the former Heliogen equity holders, including their options and unvested restricted shares

3/12 What's the source of these shares?

$HLGN insider shares totalling 154.5m. The S-4 states that only 108.6m of the shares are subject to lockup. That leaves at least 45.8m insider shares unlocked, all of which are registered and tradeable

4/12 OK fine, but why do you think $HLGN insiders will sell?

Because the SPAC deal was done at a bloated valuation of $2b (at sp $10) justified using theoretical revs 5 years in the future... A long-dated risk asset that has become all too commonplace in SPACland.

5/12 What returns are $HLGN insiders getting by selling here?

In June '21, $HLGN closed a funding rd that raised $83.4m on $750m val when they ALREADY had a LOI with ATHN for $1.85b (later bumped to $2b). That funding rd is IMMEDIATELY convertible to a $750m val following merger

6/12 And those June $HLGN funding round shares are unlocked?

From that $83.4m round alone, only $27.7m is actually locked up. These investors are looking at a **167%** valuation increase in just 7 months.

7/12 Are there earlier funding rounds looking at a quick cashout?

Lol you betcha: The $HLGN seed round was only 3.75 years ago! The A-1 round was at $20m and A-2 round, in DECEMBER 2020, was just $80m.

$HLGN SPAC merger valued co at $2b! With current $16 sp, we're over $3b now!

8/12 So uh, are those shares unlocked too?

Shares from that $HLGN Dec 2020 $80m ARE unlocked and account for 19m shares alone. Think theyll sell now when they are seeing a return of 1046% in just one year? Of fucking course they will.

9/12 OK, but what about $HLGN's actual finances?

Sure, lets beat a dead horse - As of Sept, $HLGN had $41.6m in cash yet are projecting negative cash flow totaling $385m from '22-'24. Discounting the $188m SPAC money, they will still need to access an addt'l $155m

10/12 Why didn't $HLGN insiders dump on Fri?

Cant say for sure, but probably due to the holiday and/or ticker change issues at the broker. Regardless, insiders holding those shares have zero incentive to NOT sell. Stock is going to get absolutely annihilated.

11/12 Could this possibly get worse?

😈. The insider selloff will be exacerbated by two other things. 1) As price falls, MMs will hedge their short puts by shorting shares. 2) As more shares become avail, PIPE will be able to short shares to box their position and lock in profit

12/12 TLDR?

$HLGN was taken public at a bloated valuation and at least 45.8m shares are available NOW for insiders to dump on the market at a massive profit. This is likely to crater the stock due to a massive influx of insider selling further exacerbated by MM/PIPE hedging

Disclosure: long $HLGN $10, $7.5, and $5 puts.

Much of this work was compiled and interpreted by my filing nerd friends. Thanks for the work, anonymous heros.