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Why Bloom Energy Shares Plunged 9.6% Today

By Travis Hoium – Sep 22, 2020 at 2:05PM

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A pullback was predictable for the stock.

What happened 

Shares of fuel cell company Bloom Energy (BE 5.21%) fell as much as 9.6% in trading on Tuesday as investors continued a volatile week for the company. Shares were still down 7.8% at 1:30 p.m. EDT today, but the long-term picture might not be as bad as it seems. 

So what

The last week has been wild for Bloom Energy's stock, starting with an upgrade that sent shares sharply higher on Friday. On Monday, shares jumped again after General Electric announced it's exiting the coal power-plant business. It's been a long, slow death for coal in the U.S., and as it becomes a smaller portion of the energy market, there's room for new technologies like fuel cells from Bloom Energy to take its place.

Illustration of a battery with a fuel cell near it.

Image source: Getty Images.

Today, shares are simply pulling back from the gains of the last few days, which shouldn't be all that surprising. There hasn't been a fundamental change in Bloom Energy's business over the past week, and so shares drifting lower after a pop that exceeded 20% is normal for a volatile stock. 

BE Chart

BE data by YCharts.

Now what

I wouldn't read too much into today's move. Bloom Energy's shares are still up over 10% from Thursday's close, and that's without any real news from the company. What I would pay more attention to is if the company can get more contracts for fuel cell projects now that there will be less competition from coal. Long term, Bloom Energy has a lot of potential as a renewable energy stock, so don't lose sight of those fundamentals with this short-term volatility. 

Travis Hoium owns shares of Bloom Energy. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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