Why Capstone Turbine Shares Exploded

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Capstone Turbine (NASDAQ: CPST  ) skyrocketed 13.59% as the company announced that it had signed a major supplier deal with private real estate and investment firm Related Companies. Shares of Capstone haven't been this high in over a year.

So what: No details regarding dollars were given in the announcement, but the deal is set to include several of Capstone's C65 and C200 Dual Mode microturbines over the next couple of years. This deal could also hint at a long-term relationship, as Related has stated it has commited to spending $10 billion in sustainable building designs. Hopefully, this will help Capstone in its long march toward profitability

Now what: Potential investors in Capstone Turbine need to remember one thing: The company has yet to turn a profit. Analysts expect the company to go into the black in 2015. There is no doubt it has some of the best natural gas turbine tech out there, but the question remains whether it has the ability to sell its products and capture market share from manufacturing giants GE and Caterpillar.


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  • Report this Comment On May 29, 2013, at 12:23 AM, kthor wrote:

    haven't we seen this before, few months ago then it just tumbled away back to under .90c ....

  • Report this Comment On May 30, 2013, at 12:09 AM, ae37 wrote:

    What this order says

    #1 That bankruptcy is no longer a possibility.

    (Related Companies would not be placing an order with a future failed company)

    #2 Natural gas is the future.

    (Related Companies is not installing wind power or solar Panels - they are installing Gas turbines)

    #3 Something bigger may be going on here.

    (Related Companies manages over $1.5 billion of equity capital on behalf of sovereign wealth funds, public pension plans, multi-managers, endowments, Taft Hartley plans.

    #4 It's all good

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