What happened

Shares of hydrogen fuel cell company Plug Power (PLUG 5.16%) have had an amazing run over the past year -- up more than 15-fold in 12 short months. That sounds like great news for the stock, but one analyst has a different word for it: "absurd."

In a series of tweets this morning, short-seller Kerrisdale Capital Management laid out its case against Plug stock, and it appears to be having an effect on the stock already. Plug shares are down 6.5% as of 11:30 a.m. EST. But what specifically does this analyst have against the company?  

Cartoon characters confused by stock chart arrow falling and crashing into floor

Image source: Getty Images.

So what

Announcing its short position in Plug stock today, Kerrisdale warns that investors have been investing their "hopes, dreams, and delusions of the green hydrogen energy movement" in Plug stock, "but the 'Hydrogen Economy' is a mirage." Citing Elon Musk, a well-known critic of the technology, Kerrisdale argues that "the world will *never* meaningfully use 'green' hydrogen for energy. It's too expensive and inefficient to make, store, transport, and use" -- and it's a "delusional fantasy" to think differently.

Now what

So what is the future for Plug stock, in Kerrisdale's estimation?

Pointing out that Plug gets 70% of its sales from just two customers, Amazon.com and Walmart, both of which "are incentivized to buy Plug equipment in return for cheap $PLUG warrants," the analyst implies that the company may have trouble finding other customers willing to buy its products without the warrants. At that point, the weakness of the business would become apparent.

Ultimately, Kerrisdale thinks Plug stock "isn't worth $1b, let alone $40b," and it might even be right about that. It wasn't so long ago, after all -- February 2019 -- that all of Plug Power could be bought for less than a $1 billion market capitalization.