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Plug Power Stock Price Jumps On Auto Deal

Plug Power Stock Price Jumps On Auto Deal
By: Micheal Kaufman
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Plug Power Inc. (PLUG) – the fuel-cell maker – was in the news again yesterday, after CEO Andy Marsh told MarketWatch that the company had “signed an additional order in North America with a global automaker.” Although Marsh did not divulge further details or specifics of the deal, he did say that the news would be unveiled in two to three weeks.

Among notable automobile manufacturers, Volkswagen AG (ADR) (VLKAY) has shot down any rumors of a possible collaboration, confirming that it is not working with Plug Power to develop fuel-cells, and that its own fuel-cell program is located in Germany.

Honda Motor Co Ltd (ADR) (HMC) and Toyota Motor Corp (ADR) (TM), however, plan to bring fuel-cell vehicles to the streets next year. Toyota intends to release a sedan in Japan, the US, and Europe next year, and may require the services of a fuel-cell manufacturer to design and provide the technology.

The CEO of the fuel-cell company also expects another GenKey deal, similar to the one with Wal-Mart Stores, Inc. (WMT), sometime this year. Plug Power – a leading provider of fuel-cell systems – gained prominence when the company announced late February that it had received an order for 1,738 GenKey fuel-cells to Wal-Mart stores in North America. It expects to execute the order over the next two years, and will also provide after-sales services in the form of GenCare service contracts.

After a rally to five-year highs, triggered by news of the Wal-Mart deal, Plug Power’s stock took a thrashing when a damaging report by Citron Research was published earlier this month. The report called Plug Power a “casino stock,”and referred to the stock as a “speculative moonshot.” The research company also suggested a fair value of the stock: $0.50 apiece.

But Andy Marsh's statement was enough to trigger another bull run, led by day traders, in the fuel-cell company's stock. The stock had gained $0.48, or 8.4%, and was trading at $6.18 at 2:15 pm EST yesterday when the news broke. After the news broke, Plug Power’s stock price jumped 49% to close at $8.48. Currently, in pre-market trading, the stock price is up another $0.42, or 5%, to $8.90.

The stock price of Ballard Power Systems (BLDP) also increased 32.2% to close at $5.40 and a further $0.37, or 6.9%. in pre-market trading to $5.77. Plug Power is a customer of Ballard Power and exclusively uses its fuel cell stacks for its 2,800 GenDrive systems, which are used in electric lift trucks. FuelCell Energy Inc.'s (FCEL) stock price also increased by $0.48, or 19.8%, to close at $2.91, and it is currently trading at $3.10 in pre-market trading.

On March 18, shares of Plug Power dropped 11% and tripped a market circuit-breaker, a restriction placed by the market which aims to smooth out volatility in a particular stock and avert panic selling by investors.

Since the start of the year, Plug Power stock has soared 420%, while the stock prices of Ballard Power and FuelCell Energy have increased 247% and 108%, respectively.

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