Plug Power – not yet where it should be

My virtual portfolio - Chart.
My virtual portfolio, © Wikifolio

Cashing in around the USD 5 mark, as I recommended, may have been a bit premature, seeing that the price rose as high as USD 6, but was ultimately a prudent move. At present, Plug Power’s stock again trades around USD 3. You may wonder what happened in the meantime. Simply put, expectations were too high. The net loss per share amounted to USD 0.06 in the fourth quarter of 2019. Revenue rose to USD 91.7 million, compared to USD 59.8 million generated in the prior-year quarter, which means there is some good news.

The company also announced new bookings would hit USD 300 million this year. But I still don’t know how Plug [Nasdaq: PLUG] intends to earn money. Maybe via service agreements? Ideally, it would turn a decent profit from selling hydrogen. Furthermore, I am cautious about investing in Plug because it has granted both Amazon and Walmart more than 100 million warrants. Their low exercise price of around USD 1 could mean a substantial increase in shares, diluting the stock.

The method Plug is using to record major customers and their orders is opaque to me. It is called vendor financing and could, conceivably but not necessarily, lead to restricted cash in excess of USD 210 million. I remain skeptical despite the stock’s current low. For the sake of trading, I added a small number of shares on wikifolio. Considering by how much the stock dropped, from USD 6 to below USD 3, it could see a short-lived rebound to USD 4 or USD 5 as soon as most of the market recovers from the current crisis.

Wikifolio: BZVision still shows more than 200 percent profit

My virtual portfolio BZVision on wikifolio.com has stood up well despite the turbulent times (crash!).

read more in H2-international May 2020

Risk warning
Share trading can result in a total loss of your investment. Consider spreading the risk as a sensible precaution. The fuel cell companies mentioned in this article are small- and mid-cap businesses, which means their stocks may experience high volatility. The information in this article is based on publicly available sources, and the views and opinions expressed herein are those of the author only. They are not to be taken as a suggestion of what stocks to buy or sell and come without any explicit or implicit guarantee or warranty. The author focuses on mid-term and long-term prospects, not short-term gains, and may own shares in the company or the companies being analyzed.

Author: Sven Jösting, March 19th, 2020

2 thoughts on “Plug Power – not yet where it should be

  1. Some astute observations, thanks.

    Meanwhile, I’m constantly amazed to observe how people can be so sensitive to the practical merit of fuel cells in general and PLUG in particular, and yet so blind to the fact that the shares of even the best company are sold in a market environment that will inevitably see some serious ups&downs. If the outlook is negative – as is certainly the case currently – it is highly improbable that the company will deliver stable value.

    Not to mention that not everyone at the table is honest, or haven’t readers noticed? Between short sellers, competitors and those busy cooking their books, FC co.’s will be extremely volatile for some time to come. While fundamentals are important, they are but the tip of the iceberg of investment variables to be considered.

    So by all means, invest in PLUG or FCs. Change the world for the better.

    But please, wait for the right moment.

    People who change the world for the better need to be careful not to lose their shirts.

    We need you.

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