Plug Power is on the rise again after landing a new contract for electrolysers that will create hydrogen from water in Europe
Source: Creators of Wirestock / Shutterstock.com
Plug in the power (NASDAQ:SOCKET), the hydrogen company decommissioned just a week ago, rose this week after winning a big contract for electrolyzers in Europe.
The agreement covers a basic engineering design package (BEDP) for a plant that will use electricity to separate hydrogen from oxygen in water. The company says it now has contracts of this type for plants that will produce 4.1 gigawatts of hydrogen-based electricity.
PLUG stock jumped 5.6% on the news. It opened this morning at $4.69 per share, giving a market cap of about $2.85 billion. Despite a difficult morning, PLUG stock is up more than 30% for the week.
The hydrogen puzzle
Building a hydrogen energy system involves several moving parts. You need to create or obtain hydrogen. You have to carry it where you need it. Then you need to find customers who will buy it at a profitable price.
While rivals like Flowering Energy (NYSE:BE) And Fuel cell energy (NASDAQ:FCEL) mainly focused on devices using hydrogen, Plug Power attempted to build the entire cycle.
This is expensive and requires regular injections of new capital. That’s risky because Plug Power’s “green hydrogen” must compete with supplies collected by other means. This includes hydrogen collected when burning natural gas. Plug Power issued a “going concern” warning in November amid concerns it could go bankrupt without government help.
However, having multiple capabilities means Plug Power also has multiple potential revenue streams. It can sell hydrogen, fuel cells and electrolyzers that create hydrogen.
The ups and downs can give CEO Andy Marsh a sense of smugness when things are going well. But risk in the sector also attracts short sellers. Fintel says 29% of Plug Power shares are now held short, including 62% of shares held off-exchange.
At Stocktwits, new orders increasedI’m kidding. As one said: “The trolls are lining up to be shot this morning!” »
PLUG Stock: What Happens Next?
Plug Power is a high-flying act, but all great companies start that way. The same goes for everyone who failed. Without great risk, there can be no great reward.
At the time of writing, Dana Blankenhorn did not hold (directly or indirectly) any positions in any securities mentioned in this article. The opinions expressed in this article are those of the author, subject to InvestorPlace.com Publishing Guidelines.
Plug Power is on the rise again after landing a new contract for electrolysers that will create hydrogen from water in Europe
Source: Creators of Wirestock / Shutterstock.com
Plug in the power (NASDAQ:SOCKET), the hydrogen company decommissioned just a week ago, rose this week after winning a big contract for electrolyzers in Europe.
The agreement covers a basic engineering design package (BEDP) for a plant that will use electricity to separate hydrogen from oxygen in water. The company says it now has contracts of this type for plants that will produce 4.1 gigawatts of hydrogen-based electricity.
PLUG stock jumped 5.6% on the news. It opened this morning at $4.69 per share, giving a market cap of about $2.85 billion. Despite a difficult morning, PLUG stock is up more than 30% for the week.
The hydrogen puzzle
Building a hydrogen energy system involves several moving parts. You need to create or obtain hydrogen. You have to carry it where you need it. Then you need to find customers who will buy it at a profitable price.
While rivals like Flowering Energy (NYSE:BE) And Fuel cell energy (NASDAQ:FCEL) mainly focused on devices using hydrogen, Plug Power attempted to build the entire cycle.
This is expensive and requires regular injections of new capital. That’s risky because Plug Power’s “green hydrogen” must compete with supplies collected by other means. This includes hydrogen collected when burning natural gas. Plug Power issued a “going concern” warning in November amid concerns it could go bankrupt without government help.
However, having multiple capabilities means Plug Power also has multiple potential revenue streams. It can sell hydrogen, fuel cells and electrolyzers that create hydrogen.
The ups and downs can give CEO Andy Marsh a sense of smugness when things are going well. But risk in the sector also attracts short sellers. Fintel says 29% of Plug Power shares are now held short, including 62% of shares held off-exchange.
At Stocktwits, new orders increasedI’m kidding. As one said: “The trolls are lining up to be shot this morning!” »
PLUG Stock: What Happens Next?
Plug Power is a high-flying act, but all great companies start that way. The same goes for everyone who failed. Without great risk, there can be no great reward.
At the time of writing, Dana Blankenhorn did not hold (directly or indirectly) any positions in any securities mentioned in this article. The opinions expressed in this article are those of the author, subject to InvestorPlace.com Publishing Guidelines.