Why Plug Power, BroadSoft, and Universal Display Tumbled Today

Out of the gate, Monday was an ugly day for the stock market, which suffered big losses early in the session. But even though violence in Ukraine showed few signs of letting up and even though investors worried about new data pointing to potential weakness in the Chinese economy, favorable news on the domestic economic front helped pull stocks back from the brink to post modest gains on the day. Still, shareholders in Plug Power (NASDAQ: PLUG  ) , BroadSoft (NASDAQ: BSFT  ) , and Universal Display (NASDAQ: OLED  ) couldn't escape losses Monday.

Source: Plug Power.

Plug Power dropped almost 10%, adding to its losses over the past couple of weeks. After a secondary offering of 22.6 million shares two weeks ago, Plug Power stock has lost more than a quarter of its value, as investors not only question the fuel-cell company's future prospects but also actively sell the stock short. Short-sellers can note that Plug Power has gone through similar patterns in the past, with bouts of optimism causing temporary surges in share price that have eventually given way to disappointment. However, with roughly 30% of the company's outstanding shares sold short, Plug Power could make bullish investors happy if future positive news from the company creates a short squeeze, as the high short interest could send share prices much higher.

BroadSoft sank 19% after the company's latest quarterly report included both disappointing results for the first quarter and troubling guidance for the current quarter. BroadSoft makes software and provides ancillary services that help enable communications across its customers' platforms, and with the rise in enterprise demand for data analytics and cloud-related applications, BroadSoft's industry has plenty of potential. Yet adjusted earnings and revenue fell short of what investors were looking for, despite an 11% gain in revenue compared to the year-ago quarter. Moreover, although revenue guidance for the second quarter looked solid, BroadSoft sees earnings per share coming in well short of what investors wanted to see. Without working harder to take advantage of opportunities in the space, BroadSoft won't be able to convince investors of its long-term promise.

LG Display curved OLED television. Source: LG Display.

Universal Display's losses amounted to nearly 10%, with the maker of organic light-emitting diodes seeing its share drop in response to reports that television manufacturer Samsung might not go forward with initial plans to expand its production of televisions making wider use of OLED technology. Universal Display has looked forward to greater demand for OLED products from television manufacturers like Samsung and LG Display for a long time, so if the reports on Samsung are true, then it could mark a big step backward for Universal Display. Already, investors had shown signs of impatience with the company's progress, and without a high-profile success story when Universal Display reports its first-quarter earnings later this week, the stock could see even further declines.

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  • Report this Comment On May 05, 2014, at 9:47 PM, sidneyleejohnson wrote:

    Perhaps you should focus more on the pending explosion of oled tv and oled lighting from LG. SMD seems to be getting smoked by LG's woled choices while it tried to get rgb to work on masks didn't pan out for full scale mass production. While the short selling gang of thugs continues to use their media shills to repeat a story already known since January 2014 regarding SMD's "slow down" on tv, LG continues to hammer away at its distribution plan across a variety of nations to push out OLED TV from its 8.5 Gen plant in late 2014. To overemphasize SMD's failure to innovate into large displays is to ignore the looming giant elephant in the room that is LG.

  • Report this Comment On May 06, 2014, at 3:58 PM, Hansen wrote:

    Plug Power now has three alternatives to obtain its fuel cells, which can be used in power electric forklifts http://bit.ly/1j9ISmd

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