Please ensure Javascript is enabled for purposes of website accessibility

Why Shares of Plug Power Dropped Today

By Howard Smith - Feb 18, 2021 at 11:42AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The stock continues a slide that began several weeks ago after the company last announced a capital raise.

What happened

Shares of hydrogen fuel cell maker Plug Power (PLUG -3.93%) had been on a tear in January after several strategic business announcements and subsequent capital raises. But since the company raised its guidance and announced another stock offering on Jan. 26, the stock has dropped more than 25%. 

Continuing that trend Thursday, shares were down 7% as of 10:45 a.m. EST. 

So what

Yesterday, Plug Power announced its intention for another new partnership to supply green hydrogen solutions in Europe. Last month, the company announced plans for a 50-50 joint venture with French automaker Renault (RNSDF -6.09%) to integrate hydrogen fuel cells into the European market for light commercial vehicles. The latest announcement said Plug Power and Acciona, a supplier of renewable energy infrastructure solutions, plan to launch a 50-50 joint venture to serve clients in Spain and Portugal. 

hydrogen tanks and windmills representing green hydrogen

Image source: Getty Images.

Now what

Yesterday's announcement of a new potential joint venture is seemingly good news for Plug Power. Besides the Renault partnership, the company has also recently announced a deal with SK Group that will give the South Korean industrial company a 10% stake in Plug Power with a $1.5 billion investment.

These strategic announcements have driven the stock price up to where Plug Power has increased the number of shares outstanding by more than 30% since last fall as it raised new capital. As long as management is putting that capital to good use in growing the business, that's a good thing for long-term shareholders.

But after the stock had more than doubled in January, investors have taken more of a wait-and-see approach to let the business catch up to the almost $30 billion valuation. 

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Plug Power Inc. Stock Quote
Plug Power Inc.
$15.88 (-3.93%) $0.65
Renault SA Stock Quote
Renault SA
$22.88 (-6.09%) $-1.48

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/19/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.