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Why Plug Power Stock Popped After FuelCell's Earnings

By Rich Smith - Updated Jan 22, 2021 at 5:09PM

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FuelCell's earnings weren't all bad -- and that could be good news for Plug Power.

What happened

Shares of hydrogen fuel cell company Plug Power (PLUG -0.90%) powered higher in Friday trading, ultimately closing the day up 5%.

At first glance, that seems curious. After all, Marketwatch headlined this morning with a story on how CEO Andrew Marsh just made more than $36 million buying Plug Power stock for about 1/25th of its market value by exercising stock options -- then turned around and sold those shares the very same day.  

Cartoon fuel cell car on palm of hand putting out H2 bubbles as exhaust

Image source: Getty Images.

So what

At first glance, that doesn't sound particularly promising for the company. Had Marsh exercised his options and held onto his stock, he would have increased his ownership stake in the company by 76.5% -- and demonstrated significant confidence that its stock would go higher. Instead, he chose to trade those shares for cash just as soon as he could.

Investors didn't follow the CEO's example, however, and one reason may be the earnings that rival FuelCell Energy (FCEL -0.71%) reported before the bell Thursday.

In that report, FuelCell exulted over a 54% increase in Q4 revenues. Although the company's losses almost doubled in the quarter, investors are overlooking that fault and focusing on the revenue growth instead, which showed a sharply accelerating business in which sales greatly outpaced their levels from earlier in the year. FuelCell also highlighted "significant market opportunities that we believe lay before us," words that Plug Power investors may be taking as applying to their own company as well.

Now what

At first, it looked like investors might react poorly to FuelCell's news. The stock opened lower after the report was released. But by the end of Thursday trading, FuelCell shares were up by a healthy 3.2% -- and they gained nearly 5% more on Friday. Plug Power stock moved in tandem with its peer, gaining 1.9% Thursday, and following it higher Friday.

Now, Plug Power doesn't report its own earnings until March 3, but investors won't have to wait till then to get their next dose of company-specific news. On Friday, it delivered a press release reminding investors that it has a "business update conference call" scheduled for Tuesday, now set to begin at 8:30 a.m. EST. In addition to outlining the company's plans for 2021, Plug Power promised to release preliminary results for 2020 as well.  

One direction or another, expect Plug Power stock to move significantly on Tuesday.

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Stocks Mentioned

Plug Power Inc. Stock Quote
Plug Power Inc.
$14.89 (-0.90%) $0.14
FuelCell Energy, Inc. Stock Quote
FuelCell Energy, Inc.
$3.50 (-0.71%) $0.03

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