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 manufacture of the new powerful LCS stack, through a Weichai-Ballard joint venture in China, will start in the second half, or around the middle, of 2020. In my opinion, it will lay the foundation for high, long-term growth in revenue and profit. Considering what month it is, we will not have to wait long to find out. The positive news coming from this will form the basis for price trends throughout the year. I estimate a big jump, as Ballard Power is the global leader in manufacturing fuel cells.
How quickly things can change. Just a few months ago, FuelCell Energy [Nasdaq: FCEL] risked bankruptcy due to questionable financial practices. With the help of a highly committed and successful consulting firm, the business then righted the ship. At one point, its price soared from around USD 0.13 to an intraday high of over USD 4.00 as it saw its market cap jump from USD 40 million to USD 500 million. The latest stock crash then put an end to it all and the stock took a nosedive, finishing below USD 1.00. It will certainly take some time before the price averages out to reflect business growth.
Bloom Energy stock rose for a good while, to around USD 14, before falling dramatically. The plunge was a result of the company’s relatively weak performance in the fourth quarter of 2019 and the same-quarter restatement of managed service agreements entered into between 2016 and the end of last year. Instead of over the duration of the contract, the revenue for managed services transactions had been recognized upfront.
In the previous H2-international issue, I wrote that the price rally from USD 250 to more than USD 430 already represented a short squeeze. However, I was quickly disabused of that notion when I saw Tesla’s stock hitting an intraday high of USD 1,000 before pulling back in recent weeks.
The reports are overwhelming as far as the areas of application and potential of the fuel cell are concerned, and politicians in Germany have also finally woken up. The stock exchanges have led many FC companies into a real course euphoria. But also, contradictions find their way into the media, according to which China allegedly plans to reduce or even completely discontinue the promotion of battery-powered, but also fuel cell-powered electro-mobility. On the other hand, from a very well-informed source one hears exactly the opposite, namely that precisely the promotion of the fuel cell and the associated infrastructure in China is being set up anew, that only the battery promotion is being limited.
The figures for the third quarter were satisfactory: On balance, earnings per share were $ 0.01, with the quarterly loss being due to stock-based compensation (issuance of shares and options to employees), which is “extraordinary” accounting and non-operating.
This remark (“major new customers”) stuck particularly with me, because Ballard – although already on board with many top partners and large companies in research technology – expects further major new customers, according to CEO Randy MacEwen in the telephone conference on the occasion of the figures for the fourth quarter of 2018.
In the first quarter, Bloom was able to generate a good US$ 200 million in sales. The bottom line was a minus of US$ 8.8 million or minus US$ 0.22 per share. Nevertheless, a noticeable improvement compared with the same quarter of the previous year, in which a minus of US$ 22.5 million was reported. This represents growth of around 18.5 percent. The cash position is very healthy, amounting to US$ 327.9 million plus US$ 42 million from Power Purchase Agreements (PPAs).
FuelCell had to feel what it means to fall for smart investors (loan sharks?). The preference shares that could be converted into ordinary shares were probably used to push down the price via short selling and to receive more and more shares due to a conversion ratio. Did the analysts who evaluate and recommend FuelCell Energy simply overlook this? Now the capital has been merged. The number of artificially inflated shares via conversion of preference shares has now been significantly reduced. Unfortunately, all this seems to leave the management cold, otherwise they would at least make a press release.