Plug Power Inc (NASDAQ:PLUG) shares were worth pennies a few months back, but now they are trading over $10. So, what has happened in this short span that resulted in the spike? The answer is the Tesla effect. Anything even remotely connected to Tesla Motors Inc (NASDAQ:TSLA) seems to be taking off these days.

Plug Power

A report from Seeking Alpha by Stock Traders Daily states that “a significant tie to what Tesla Motors Inc (NASDAQ:TSLA) has decided to do,” is probably a major factor that resulted in the jump in share price for Plug Power.

Tesla inspired model boosting the stock

Tesla Motors Inc (NASDAQ:TSLA) has decided to make batteries in large numbers, and it is expected that the company would sell the batteries to other automobile manufacturers. There have been speculations that Plug Power could follow the same model; however, as of now there has been no official word from the CEO.

The fuel cells offered by Plug Power Inc (NASDAQ:PLUG), could be a perfect fit for the model, but there has been no intention from the company, until now, to sell fuel cells to other players. So, there is a good possibility that the company might partner with someone in the automobile industry. Such speculation, according to the author, is the primary reason for the increase from pennies to over $10.00.

Weak fundamentals for Plug Power

The author believes that Plug Power Inc (NASDAQ:PLUG) is a stock with “ebbs and flows,” which means the stock could change direction on comments from the CEO, even from posts on message boards and blogs. The stock “moves like a wind,” according to the author. Plug Power is being traded in heavy volume with millions of dollars changing hands every day. For a speculative stock, this is something unusual.

It must be noted that in 2000, the stock was trading around $1,400, but in February of 2013 it was worth $0.15 only. The [otential that the fuel cell industry holds has been driving the stock now. Some feel that Plug Power Inc (NASDAQ:PLUG) could become a dominant player in the segment, but these are just speculations as nothing official has come from the company yet.

“Of course that can change, but right now the fundamentals do not warrant an investment in PLUG,” believe the author. Presently, Plug Power Inc (NASDAQ:PLUG) is trading at 10x projected revenues, and a negative EPS. Such parameters are a warning even when the companies are growing fast, but “PLUG is not even growing.”