In my view, Plug Power [Nasdaq: PLUG] is definitely on the right track: Building and expanding liquid hydrogen production facilities while planning to acquire United Hydrogen. The latter’s 6.5-ton annual capacity should be raised to 10 tons, thus meeting 25 percent of Plug’s in-house demand, meaning eventually the profit margin can come from consumables. Plug is also negotiating with an electrolyzer manufacturer that could or should be absorbed. That all looks very good to me. In a few years’ time, Plug intends to cover more than 50 percent of its own production with green hydrogen.
Now, gross billings should add up to USD 300 million this year and the goal is nearly met. Plug also intends to branch out into the backup power market, having already developed a new 125-kilowatt stack. In the most recent funding round, USD 200 million were raised via convertible senior notes with 3.75 percent interest and a 2025 maturity date. Called green bonds, they can be repaid in cash, in shares or through a combination of both. Plug decides how to pay back the money, while bondholders choose the date. Proceeds should be used to settle prior debt obligations and to provide funds for general business activities. However, I am somewhat leery of an investment brochure paragraph stating the notes can be terminated if certain requirements are not met. And Generate Capital’s debt facility of USD 100 million at 9.5 percent interest could turn out be some complex construct, i.e., be tied to certain conditions stockholders need to be wary of, like in FuelCell Energy’s case. My personal opinion.
read more in H2-international August 2020
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, written June 13th, 2020