Morning dawned bright for investors in hydrogen fuel cell stocks Plug Power (NASDAQ:PLUG) and Bloom Energy and for fans of the hydrogen economy in general Monday. As of 12:05 p.m. EDT Monday, Plug stock is up a strong 10.8% and Bloom Energy stock is doing even better — up 11.6percent.
Today let’s first address the bull in the area: why FuelCell’s peer gas cell stocks are doing so well. Today, Plug Power announced that it is collaborating with “other transportation, gas and utility industry executives” to market a study that is new consulting firm McKinsey called the Road Map to a US Hydrogen Economy.
Plug notes that it is “the country’s individual that is largest of liquid hydrogen today” and believes that “a shift to broader use of hydrogen brings tremendous value,” to green energy advocates and people whom fear the use of petrochemicals are exacerbating global warming. It also brings value to Plug Power itself. In the report that is upcoming Plug says McKinsey will explain exactly how “hydrogen demand in the US could reach 17 million metric tons by 2030 and 63 million metric tons by 2050, roughly equivalent to 14 percent of energy demand” — and Plug is situated at the beating heart of this hydrogen economy as a premier producer of hydrogen for power use. Morning dawned bright for investors in hydrogen fuel.
These are big numbers Plug is celebrating — probably even bigger than Plug itself can supply all on its lonesome. In a statement about the study, CEO Andy Marsh spoke only of servicing “more than 1,000 tons per by 2030” of hydrogen supply — about 365,000 tons per year, far short of the 17 million tons envisioned, much less the 63 million time. This explains why it’s not just Plug stock going up today, but also Bloom Energy, another hydrogen supplier that is putative.
Now why is FuelCell Energy stock going down? A couple of reasons suggest on their own. First, unlike Plug and Bloom, FuelCell Energy hasn’t (yet) announced it’s diving into hydrogen production as being a company focus that is key. But second, also unlike Plug and Bloom, FuelCell just announced that to obtain the cash to keep itself solvent, it shall have to create and sell some 50 million new shares of stock. I suspect it is this action, therefore the stock dilution it promises, that is investors that are making away from FuelCell stock today.
That being said, FuelCell’s autumn may also tell a tale that is cautionary investors in Bloom Energy and Plug Power. Currently, none of these three stocks is lucrative, nor are they producing the positive cash that is free they need to stay viable businesses. Than they may look today until they truly are, the fates of Plug Power stock and Bloom Energy stock could be tied more closely to FuelCell Energy stock.