What happened

Fuel cell stocks are on the fritz as trading gets underway for Friday. On no apparent "new" news whatsoever, shares of Ballard Power (BLDP -3.37%) are plunging 7.3%, Bloom Energy (BE -8.49%) is down 9.1%, and only Plug Power (PLUG -4.93%) is getting off more or less lightly -- down 4.6% (all numbers as of 9:55 a.m. EDT).

Why are these stocks falling?

Three red arrows going downward and crashing through the floor.

Image source: Getty Images.

So what

I suppose one's initial instinct would be to blame Dr. Fauci. This morning, the head of the National Institute of Allergy and Infectious Diseases (NIAID) was quoted on MarketWatch warning that the novel coronavirus is "probably a cut above" previous epidemics such as Ebola, HIV/AIDS, and Zika and is "very intense." He said we are not "near the end of this" yet.

The NIAID director added that flying on an airplane "is a risk" and furthermore that "I am not going to restaurants right now." And while none of the above has anything to do with fuel cells directly, neither is it good news for the economy as a whole -- probably the reason the S&P 500 is down nearly a full percentage point already and the reason volatile alternative energy stocks are reacting even more harshly than others.

Now what

And there's good reason for that. Yesterday, as you may recall, hedge fund Lakewood Capital issued a startling report on the state of fuel cell stocks in general (and Ballard in particular). The hedge fund warned that despite running up more than 100% this year, Ballard remains a company that is "consistently loss-making and cash-burning."

Lakewood could just as easily have substituted the name Plug Power for Ballard, though -- a stock that's tripled in the past year but gone 23 straight years without ever showing signs of turning profitable. Or it could have said Bloom Energy -- six straight years of no profits.

Indeed, Lakewood did point out that it has "tracked Ballard Power (and several other fuel cell stocks)" (emphasis added) "for the past decade, and on five separate occasions, investors bid up the shares in a frenzy only to be left holding the bag months later when they came crashing down."

Ballard was the one Lakewood told investors to short yesterday. On a day like today, when the selling is already widespread, traders might be worrying that Plug Power and Bloom Energy will be next.