Plug Power (NASDAQ:PLUG) stock is down 4% as of 11:20 a.m. EDT Monday -- and that's kind of curious given today's news.
This morning, Plug announced that it is teaming up with natural gas equipment maker Chart Industries (NYSE:GTLS) and oilfield equipment maker Baker Hughes (NYSE:BKR) to become "cornerstone investors" in something called the "FiveT Hydrogen Fund."
The companies describe the FiveT Hydrogen Fund (FiveT) as "a unique new clean-hydrogen-only private infrastructure fund," denominated in euros and "dedicated to delivering clean hydrogen infrastructure projects at scale."
Its purpose will be to "exclusively finance projects in the production, storage and distribution of clean hydrogen" (presumably by buying products from Plug, Chart, and Baker Hughes), and will accumulate 1 billion euros for this purpose. Plug will contribute the bulk of the initial investment -- 160 million euros, or $200 million -- and Chart and BHI will each contribute 50 million euros, or $60 million.
In short, the companies appear to be cooperating to provide funding that can be used primarily to offer loans to prospective customers -- or in other words, selling their products on credit. And if this really is the upshot of the announcement, it's probably understandable why investors are less than enthused. If demand for hydrogen and fuel cell products were really strong, there presumably wouldn't be any need to offer such financing.
It's also worth pointing out that so far, these three companies are contributing only the first 260 million euros, and still need to convince other players in the nascent hydrogen economy to join with them and pony up the remaining 74% of the FiveT fund's targeted size. How successful they are with that effort will give us further clues whether this is a great idea or a nonstarter.