Why Plug Power Stock Dipped On Seemingly Good News
Fuel cell company stock Connect the power (NASDAQ: PLUG) are acting a little weird today.
After initially exceeding 1% on news that Plug has signed an agreement with Apex Clean Energy to co-produce “green hydrogen” gas for use as renewable fuel source, Plug’s stock quickly turned its tail late in the morning and has been falling steadily since, dropping 2.8% at 1:00 p.m. EDT.
Image source: Getty Images.
So what’s up with this? Well, let’s consider what Plug told us in today’s press release – and also what he didn’t tell us.
Good news first: Plug partners with “one of the country’s largest independent clean energy companies,” pledging to purchase 345 megawatts of wind power from the utility and cooperate with Apex to develop a “green hydrogen production facility”.
Since the energy supplied by Apex will be renewable – derived from wind turbines – when used to separate hydrogen atoms from water by electrolysis, the result will be a form of hydrogen that Plug can market as ” green ”(because it didn’t require burning coal or oil to produce the electricity that produced the hydrogen). And Plug notes that “once operational, the plant is expected to produce over 30 metric tonnes per day of clean liquid hydrogen, enough to power the equivalent of over 2,000 light commercial vehicles or over 1,000 heavy trucks. of class 8 “.
So far, so good. But here’s what Plug didn’t tell us: First, how much he’ll pay Apex for electricity. This is something investors need to know, in order to be able to determine whether the input costs to produce green hydrogen will be low enough that, once sold by Plug, the hydrogen will be profitable.
And second, Plug didn’t say how much it would cost to build the green hydrogen production facility in the first place. Presumably it will be expensive, but will it cost more than the $ 4.75 billion in cash that Plug has, or will Plug have to go into more debt to complete the project?
This is the Plug type of stuff investors should want to know before deciding if today’s Plug news is good or bad. And the fact that Plug isn’t telling them could well have something to do with the fall in Plug’s stock price today.
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