What happened 

Shares of hydrogen forklift specialist Plug Power Inc (NASDAQ:PLUG) rose as much as 18.9% on Friday after the company announced an expanded agreement with Wal-Mart Stores (NYSE:WMT). As of 12:42 p.m. EDT, the stock was up 11.3%. 

So what

Wal-Mart has agreed to install Plug Power's GenKey fueling station and fuel cell energy solutions in 30 more locations over the next three years, adding to the 10 locations expected to be up and running by the end of this year. The deal is expected to be worth about $80 million for Plug Power. 

H2 art made out of greenery.

Image source: Getty Images.

In addition to the supply agreement, Wal-Mart was given 55,286,696 warrants to buy shares of Plug Power stock. Of those, 5,819,652 will "vest upon execution of the new program agreements" at a price of $2.1231 per share. The rest of the warrants will vest in $50 million purchase increments with prices set to where Plug Power's shares are trading. 

This follows a deal earlier this year in which Amazon (NASDAQ:AMZN) agreed to buy $70 million of product and got 55,286,696 warrants as part of the agreement with a $1.1893 exercise price. 

Now what

Wal-Mart and Amazon are two key customers for Plug Power, and the expansion of hydrogen fuel cells in their warehouses is good news for the company. But these are also customers that clearly have all of the power in this relationship and now hold warrants that will add nearly 50% to the company's shares outstanding if exercised. That obviously takes away from upside investors may get from these agreements. Unless Plug Power can prove it's able to make money selling to customers who aren't Wal-Mart and Amazon, I don't think this will be a great stock for investors. 

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.