What happened

Shares of Ballard Power (NASDAQ:BLDP) dropped more than 12% in Thursday afternoon trading. Fellow fuel cell company Plug Power (NASDAQ:PLUG) tumbled, too, falling 6% through 2:15 p.m. EDT. Enphase Energy (NASDAQ:ENPH), an alternative energy stock that focuses on solar energy, rather than fuel cells, surged 5% initially, but then got caught in the downdraft, falling as much as 2.5%.

So what

Granted, the whole stock market seems to be tumbling this afternoon. Still, the S&P 500's down only 1.1% or so, and even the tech-heavy Nasdaq has fallen only 2.1%. With losses at Ballard and Plug down so much more than that, I suspect what we're seeing here is more company-specific. In fact, I suspect the whole thing might be traced back to Ballard Power.

3 colorful arrows all pointing down

Image source: Getty Images.

Just before 11 a.m. this morning, you see, Bloomberg ran an article discussing hedge fund Lakewood Capital and its just-released second-quarter shareholder letter. In the letter, Lakewood observed that Ballard stock has more than doubled this year, yet the company is "consistently loss-making and cash-burning." The company, Lakewood went on to point out, "has never earned more than $40 million in annual gross profit" (much less net profit), yet carries a $4.6 billion market cap.  

Seeing a disconnect between the high stock price and the low financial performance, Lakewood Capital named Ballard Power its newest short.

Now what

It's hardly surprising that investors would sell off the stock after a note like that. Here's why bad news for Ballard might be turning into bad news for Plug Power and Enphase as well.

"We have tracked Ballard Power (and several other fuel cell stocks) for the past decade, and on five separate occasions, investors bid up the shares in a frenzy only to be left holding the bad months later when they came crashing down," warned Lakewood.

That "several other fuel cell stocks" bit probably sounds pretty ominous to holders of Plug Power stock -- up a "frenzied" 300% over the past year. Investors in Enphase -- a clean triple over the past year -- may be worrying today that Lakewood might turn its jaundiced eye toward solar stocks next.

In its defense, though, unlike Ballard and Plug, Enphase is at least a profitable and free-cash-flow-positive company. This one stock is not like the others, and even if Ballard and Plug deserve to be sold, I'm not convinced that Enphase does too.