To say that Plug Power Inc. (NASDAQ: PLUG) has been on a screaming run might be a bit of an understatement. The problem is that not all good things last forever, and sometimes when high-flyers fall from grace they truly fall. Plug power has seen these crazy runs before, and now we have to ask if the zany run has finally met its top. Unfortunately, this is a situation that can still go either way for now and we wanted to look at both sides of the coin here.
The recent trading history is more than interesting. Shares closed out 2013 at $1.55, then rose to $2.33 on the first day of 2014. Then shares had literally risen every day of this year, right up until today. After hitting a high of $4.90 on Wednesday, the stock closed down at $4.55, and shortly before Thursday’s close the stock was down a sharp 20% at $3.65. The volume with almost two hours of trading left was already at almost 50 million shares.
Here is where this gets even more interesting. Plug Power was trading at just $0.74 at the end of November. The stock was at $0.58 at the end of October. It is hard to believe, but the 52-week low is $0.12. Even after the 20% drop in the stock price on Thursday, Plug Power’s market capitalization is $365 million.
It has been a winner since the U.S. Department of Energy is funding to adapt its fuel-cell systems to extend the range of electric trucks. The DOE will provide $3 million for the company to develop hydrogen fuel cells for 20 FedEx delivery trucks. Plug’s ambition is to double the 80-mile range currently.
The previous boom has been from the company saying that its targeted orders were about $32 million in the fourth quarter. Now it is up to the company to show whether or not it can be profitable in 2014.
This company effectively has no real research from Wall Street any longer. Its history goes way back to right before 2000 and the stock used to trade many times the current price. It traded as high as $8 back at the start of 2011 and was peaking above $10 in 2009. Again, that is way down from the past when you account for a reverse stock split of 1:10 back on May 20, 2011.
Investors need to understand that this is a situation that can go either way, even if a much needed breather could result in a total time-out. When Wall Street speculators want to get behind a stock, they won’t use much fundamental analysis when a company has a market cap under $500 million. Plug Power’s sales were $26.1 million in 2012, $27.6 million in 2011, and almost $19.5 million in 2010.