What happened

Shares of hydrogen fuel cell manufacturer and hydrogen gas producer Plug Power (NASDAQ:PLUG) slipped in early trading on the Nasdaq Monday, falling 7.3% through 11:11 a.m. EST. But is this mere volatility, or is there some actual news behind today's declining share price?

Let's find out.

Car rear end marked HYDROGEN FUEL CELL

Image source: Getty Images.

So what

The most obvious news item today doesn't seem sufficient to explain investors' continued nervousness about Plug. This morning, the company announced that it has appointed Avangrid vice president Kimberly Harriman to sit on Plug Power's board of directors. An energy industry veteran with decades of experience in state government relations and public affairs working with and for utility companies across 22 states, Harriman seems a logical choice to sit on the board of a company like Plug.

Her appointment does not look like a logical reason for Plug stock to be down 7%.  

On the other hand, there's other news today that does seem like it could be tied to a sliding stock price at Plug. A press release went out this morning from privately held PowerTap Hydrogen Fueling Corp, announcing that this company is "building out a network of hydrogen fueling stations in the U.S," and is "in talks with various cities and governments across the world" regarding similar projects. Unlike Plug, which aims to produce hydrogen in one location and ship it to another for fueling, PowerTap claims to possess "revolutionary technology" that "allows them to produce on-site hydrogen" at the location where fueling will take place -- cheaper and more efficiently than how Plug operates.

Indeed, the company says it already has such fueling locations "near LAX airport in California, Texas, Massachusetts, and Maryland, with plans to expand" further.

Now what

According to data from S&P Global Market Intelligence, PowerTap is a subsidiary of Canada's Clean Power Capital, a sub-$500 million company that makes early-stage investments in the energy sector. On its own, the company doesn't seem to be of a size that could effectively compete with Plug Power -- still valued at more than $28 billion even after today's decline.

Nevertheless, PowerTap's announcement today does appear to play into a larger story of more and more companies glomming onto the hydrogen economy trend -- companies like TECO 2030 and its Norwegian fuel cell "gigafactory" for example. The more that happens, the less unique Plug stock may appear to investors -- and the greater the risk that momentum traders will abandon Plug stock in favor of some brighter, shinier object.

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.