Plug Power Inc (NASDAQ:PLUG) is one of the most volatile stocks these days. Some investors are extremely bullish on the stock, saying that its fuel cell technology has immense growth potential. Others are extremely bearish, calling it just a fad, over-valued and a penny stock. Amid all the arguments and volatility, the stock has returned over 1375% in the past 12 months.

Plug Power

Short interest in Plug Power declines

Short sellers clearly reaped the benefits when Plug Power Inc (NASDAQ:PLUG) was trading at $11 in March, then plunged below $5 in subsequent weeks. But a number of ‘positive’ developments in the past few weeks have probably scared short sellers. Short interest in the stock has declined from 30.4 million at the end of March to 26.05 million on April 30. Short sellers have been busy covering their positions as Plug Power shares have started moving up.

Two events have given the stock a big boost in the past few weeks. First, Plug Power Inc (NASDAQ:PLUG) received an order of 182 GenDrive units by Central Grocers. Central Grocers was already using Plug Power’s fuel cell units. Renewal of the deal signals that Plug Power’s customers have faith in its technology, and GenDrive was bringing benefits to Central Grocers’ operations. It may encourage other grocers to try fuel cells for their forklifts.

Plug Power is making good progress says Cowen

The second reason for the increase was an upgrade by Cowen & Co. from Market Perform to Outperform. Cowen analyst Robert Stone upgraded the stock after visiting Plug Power’s factory where he saw a high level of activity. Mr. Stone said that the YTD bookings of $80 million, almost double the full-year bookings of 2013, show that the company is making significant progress. Strong bookings will lead to better revenue. So, the stock deserved an upgrade, in his opinion.

Another important factor for Plug Power Inc (NASDAQ:PLUG) is its cash position. PLUG ended the first quarter with $174 million in cash. That money will help the Latham, New York-based company meet its working needs, and pursue capital plans, regardless of whether shorts are longs are correct.