Ceres Power Holdings plc tumbled on Thursday after Grizzly Research disclosed a short position in the stock and said in a report that the company was "fuelling investors' illusions with misleading promises".
Ceres is a developer of solid oxide electrolyzer cell (SOEC) and solid oxide fuel cell (SOFC) technology for use in distributed power systems.
Grizzly said it believes the company is hiding a flawed business model with "abysmally small revenue potential behind a façade of big-name announcements and lofty projections".
The short seller noted that Ceres shares are up more than 200% since its partner Doosan Fuel Cell announced the start of its SOFC systems in their new 50MW factory using Ceres' technology in July 2025.
Since then, Ceres only signed a new manufacturing agreement with its long-standing partner and biggest shareholder WeiChai, with whom it failed multiple times to bring joint products to market since 2018, Grizzly said.
"Based on our research, we believe investors are misled by Ceres' projections given the near-future prospects and the multiple past failures of Ceres partnerships.
"For example, we found evidence that Doosan's 'mass production start' since July 2025 suffers a very slow take-off and interest in SOFC products, as Doosan Fuel Cell only currently secured a 9 MW supply contract with a related-party in September 2024."
According to Grizzly's research, this should at best generate $1.35m in royalties for Ceres, which it said was "a small prize" for a 10+ year struggle to reach commercialisation stage.
"We get a 'déjà vu' impression about this situation, as Ceres has announced dozens of partnerships with global companies to commercialize a product with Ceres' technology," it said.
"The vast majority of these partnerships vanished without much communication from the company. We find since vanished projections from Ceres' 2022 Annual Report to 'reach multi GWs by 2030' ridiculous and frankly, misleading."
Grizzly said that as far back as 2017, Ceres touted that possible annual gross margin for its licensing model was around $1bn annually. Eight years later and the company still has not generated any significant royalties.
In conclusion, Grizzly said it thinks that Ceres' licensing business model is deeply flawed.
"The company essentially shifts all the risk to its licensees while relying entirely on them to commercialize a new product. The capital required to bring a product from the IP acquisition to a potential commercialisation is enormous, while the total addressable markets of both the SOFC and SOEC technologies are small, despite being relatively known technologies.
"We are afraid investors will find themselves once again sorely disappointed by the results exciting sounding partnerships will deliver. In this report we first examine the most recently announced deal with Doosan that has now reached commercial stage, but will unfortunately soon reveal to investors the abysmal customer interest and minimal revenue potential associated with Ceres' technology."
At 1530 GMT, the shares were down 7% at 286.85p, having fallen to as low as 260.65p earlier in the session.