What happened

It's been kind of a yo-yo day for investors in Plug Power (NASDAQ:PLUG), one of the pioneers in hydrogen fuel cell energy. One day after the company reported Q3 earnings, Plug shares first rushed out of the gate, rising more than 6%...then gave all those gains back...then plunged more than 6%, only to end up where we are right now, at 11:15 a.m. EST, with Plug shares down 2.5%.

So what exactly is going on here?

Chalkboard drawing of stock chart arrow going up, being erased, and pointing back down.

Image source: Getty Images.

So what

Plug had both good news and bad news for investors yesterday. On the bad-news front, the company reported a GAAP loss of $0.11 per share and a pro forma loss of $0.04, both numbers apparently short of Wall Street estimates. This was despite sales coming in at $107 million, up 80% year over year.

When calculated according to generally accepted accounting principles (GAAP), Plug's loss grew by an astounding 37%, despite the company's share count exploding 57% higher, spreading its losses out across many more shares. (That is to say, but for all the stock dilution, Plug's per-share losses would have grown much more -- by about 117%, in fact.)

Free cash flow at the company was just abysmal. Over the first three reported quarters of this year, Plug has now burned through $168.2 million in negative FCF -- 3 times its cash burn of one year ago.

Now what

On the plus side, though, Plug is sticking to its guns and sticking to its promises to produce $325 million to $330 million in "gross billings" by the end of this year -- up from a prediction of $310 million previously -- and to grow that number to $1.2 billion by 2024, with $200 million in "operating income" besides.

The fact that Plug isn't wavering from that promise, I suspect, is why investors aren't punishing the share price more severely today. It's the fact that current-year earnings are so much worse, meanwhile, that has me afraid of this stock.

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.