Plug Power Inc (PLUG) Rising After Yesterday’s Nosedive

0
Plug Power Inc (PLUG) Rising After Yesterday’s Nosedive
Plug Power Inc

Plug Power Inc (NASDAQ:PLUG) initially continued Tuesday’s dive in premarket trading this morning before shares turned around, climbing as much as 5% before turning back around again. The stock surged 24% on Monday, closing above $10 a share after little to no news about it was reported. Then Tuesday rolled around and with it, an extremely negative report from Citron Research, which sent shares down more than 40%.

Play Quizzes 4

Citron calls Plug Power a “casino stock”

The firm called Plug Power Inc (NASDAQ:PLUG) a “casino stock,” saying that shares could return to 50 cents, which they once traded at. According to Citron, this type of stock is “the lowest form of speculative moonshot” and “can trade twice its outstanding shares in a single day while turning over its entire float on people gambling that they can find a buyer at a higher price.

London Value Investor Conference: Joel Greenblatt On Value Investing In 2022

The first London Value Investor Conference was held in April 2012 and it has since grown to become the largest gathering of Value Investors in Europe, bringing together some of the best investors every year. At this year’s conference, held on May 19th, Simon Brewer, the former CIO of Morgan Stanley and Senior Adviser to Read More

The firm also found numerous problems, like the fact that Plug Power Inc (NASDAQ:PLUG) has fallen short of its quarterly guidance numerous times. The company will release its next earnings report on Thursday, so we could be seeing some speculative trades around that. In addition, that report will come in at 10 a.m. Eastern, which is extremely odd because companies almost never report earnings during regular trading hours.

Plug Power’s management seems unsure

According to Citron analysts, even Plug Power Inc (NASDAQ:PLUG)’s management seems to lack conviction on whether the company will be able to perform well. In fact, management at one time would not buy into the company’s capital round offering of 15 cents a share.

The company also doesn’t own much of the technology it uses, meaning it buys the fuel cells from Ballard Power Systems Inc. (NASDAQ:BLDP). Citron actually likes Ballard better than Plug Power Inc (NASDAQ:PLUG). Perhaps unsurprisingly, shares of Ballard are up 2% in premarket trading this morning.

And finally, Plug Power Inc (NASDAQ:PLUG)’s main customers have been utilizing the alternative fuels tax credit, which expires in 2016. Needless to say, reliance on those tax credits is a big problem beyond 2016, which means Plug Power’s future doesn’t look too bright, at least for now.

Updated on

Michelle Jones is editor-in-chief for ValueWalk.com and has been with the site since 2012. Previously, she was a television news producer for eight years. She produced the morning news programs for the NBC affiliates in Evansville, Indiana and Huntsville, Alabama and spent a short time at the CBS affiliate in Huntsville. She has experience as a writer and public relations expert for a wide variety of businesses. Email her at Mjones@valuewalk.com.
Previous article Xbox Live Sign-In Issues Fixed; Not Related To Titanfall Launch
Next article Apple Inc. Stock Upgraded To Outperform By Pacific Crest

No posts to display