Hydrogen fuel cell stocks are in the news again Tuesday -- and not in a good way.
As of 10:20 a.m. EST, shares of Bloom Energy (BE 6.51%) are down 2.6%, Plug Power (PLUG 12.38%) is down 6.2%, and FuelCell Energy (FCEL 8.20%) is falling hardest of all -- down 9.4%. In fact, at a share price of just $10.46, FuelCell stock has lost 22% of its value since the day before Christmas Eve's abbreviated trading session. Why?
To eliminate the obvious answer: No, this isn't a case of Wall Street analysts attacking fuel cell stocks. To the contrary, the most recent analyst action we've seen was when Morgan Stanley came out with improved price targets on both Bloom Energy and Plug Power just ahead of the Christmas holiday.
Rather, what we're seeing today appears to be continued disappointment among renewable energy investors in the contents of Congress' just-passed coronavirus stimulus bill. Tucked into this relief bill alongside provisions sending $600 stimulus checks to taxpayers were $35 billion in subsidies for renewable energy in America.
The problem is there's minimal money in the stimulus bill for fuel cell companies. Bloom and FuelCell might perhaps benefit from $500 million earmarked for researching ways to reduce industrial emissions -- or they might not. Plug could potentially get a piece of $2.6 billion set aside for researching "sustainable transportation" -- or it might miss out, too.
In any case, there are no direct subsidies to help the nascent fuel cell industry get off the ground -- and that has fuel cell investors less enthused over the relief bill's passage than investors in other industries (such as nuclear power).
If fuel cell companies were already profitable on their own without subsidies, that might not be such a big problem. However, despite big promises of future profits, companies in this industry have remained deeply unprofitable for years, and in some cases, for decades. Investors were perhaps counting on Congress to help them fix that with stimulus cash.
And it didn't happen.