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Why Did FuelCell Energy, Ballard Power, and Plug Power Shares Just Drop?

By Rich Smith – Updated Feb 27, 2020 at 12:42PM

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Even doomsday-prepper stocks now suffer from coronavirus.

What happened

When you think about it, fuel cell stocks like FuelCell Energy (FCEL 7.14%), Ballard Power (BLDP 9.02%), and Plug Power (PLUG 7.20%) are kind of the ultimate "prepper" stocks.

Divorced from the grid, fuel cells should permit their operators to generate electric power on their own -- far from possible contagion by the SARS-CoV-2 coronavirus. And yet, this defining attribute of fuel cell companies isn't sparing the stocks of FuelCell, Ballard, and Plug Power today. All three have been caught up in the coronavirus panic, and as of 12:05 p.m. EST on Thursday, they're down 7.9%, 10.1%, and 10.2%, respectively.

A single, blue, square hydrogen fuel cell

A hydrogen fuel cell. Image source: Getty Images.

So what

Why aren't fuel cell stocks doing better than other stocks today -- and, in fact, doing quite a bit worse? (The average Nasdaq stock is only down 1.8%.)

I'd argue it's because of this other defining attribute of fuel cell stocks: Not one of them is generating positive free cash flow to sustain its business. Not one is making any money. In fact, over the past decade, Ballard Power and Plug Power have only notched profitable quarters once each. And FuelCell Energy hasn't even accomplished that.

Now what

So with the world's economy apparently collapsing because of the coronavirus, companies that can't earn a profit aren't the best bets to survive the crisis. Which is probably why FuelCell, Ballard, and Plug Power stocks are all performing significantly worse than average today.

Rich Smith has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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Stocks Mentioned

FuelCell Energy, Inc. Stock Quote
FuelCell Energy, Inc.
FCEL
$3.75 (7.14%) $0.25
Plug Power Inc. Stock Quote
Plug Power Inc.
PLUG
$23.39 (7.20%) $1.57
Ballard Power Systems Inc. Stock Quote
Ballard Power Systems Inc.
BLDP
$6.89 (9.02%) $0.57

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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