Hold on Tight, Plug Power Investors: This Roller Coaster's Not Done Yet

The stomach-churning, roller-coaster ride for Plug Power (NASDAQ: PLUG  ) continues this week, with the stock rebounding more than 15% today after crashing hard on an analyst's research report yesterday that called for the stock to implode entirely once the hype dies down.

On Tuesday's edition of "Stock of the Day", host Mark Reeth and Motley Fool analyst Simon Erickson discussed the incredible ride Plug Power has had so far. Simon tries to look through the exuberance and notes that while this is a disruptive new technology that has attracted some big-name clients so far, he still views it ultimately as a manufacturing company, which needs to pitch, manufacture, and ship each and every sale. While the market may be hoping for the next Tesla Motors with this stock as excitement over electric vehicles continues at a fever pitch, the price here may have become entirely disconnected from any reasonable valuation.

Simon also points to the fact that the share count has tripled in the past three years, prior to the stock's jaw-dropping 3,500% gain over the past year. Simon's pretty convinced that the capital-intensive nature of the business will mean more share dilution down the road, and says that with the company still in the negative on its gross margin line, he definitely doesn't like this stock today.

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  • Report this Comment On March 12, 2014, at 11:48 PM, Triller wrote:

    Obviously this investor is angry he or she didn't see this one coming. Ready to offer up the next ten bagger? This could have been it,and he, she didn't see it. Awwwwhhh, too bad. What about BLDP and FCEL. FCEL looks like the best of the three from technical standpoint and it's the only one in the Fuel Cell industry that was modest in its 300% run-up....

  • Report this Comment On April 01, 2014, at 7:34 AM, jaketen2001 wrote:

    ?????? Errrrr, Tesla needs to make and ship every one of its cars also. Not that Tesla's valuation is supported, but the market can feel free to compare the two.

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