What happened
Shares of fuel cell company Plug Power (PLUG +11.62%) are acting kind of weird today.
After initially popping more than 1% on news that Plug has signed an agreement with Apex Clean Energy to co-produce "green hydrogen" gas for use as a renewable fuel source, Plug shares quickly turned tail in the late morning hours, and have been falling ever since, reaching a 2.8% decline as of 1 p.m. EDT.
Image source: Getty Images.
So what
So what's up with that? Well, let's consider what Plug told us in today's press release -- and also what it didn't tell us.
Good news first: Plug is teaming up with "one of the nation's largest independent clean energy companies," promising to buy 345 megawatts of wind power from the utility, and to cooperate with Apex to develop a "green hydrogen production facility."
Because the power provided by Apex will be renewable -- derived from windmills -- when used to separate hydrogen atoms from water through electrolysis, the result will be a form of hydrogen that Plug can market as "green" (because it didn't require burning coal or oil to produce the electricity that produced the hydrogen). And Plug notes that "once operational, the plant is anticipated to produce over 30 metric tons per day of clean liquid hydrogen, enough to fuel the equivalent of over 2,000 light commercial vehicles or over 1,000 heavy duty class 8 trucks."
Now what
So far, so good. But here's what Plug didn't tell us: First and foremost, how much it will be paying Apex for the power. This is something investors need to know, so as to be able to figure out whether the input costs to produce the green hydrogen will be low enough that, when sold by Plug, the hydrogen will be profitable.
And second, Plug didn't say how much it will cost to build the green hydrogen production facility in the first place. Presumably, it will cost a lot, but will it cost more than the $4.75 billion in cash that Plug has on hand, or will Plug have to take on more debt to complete the project?
These are the kinds of things Plug investors should want to know before deciding whether Plug's news today is good or bad. And the fact that Plug isn't telling them just might have something to do with Plug's falling stock price today.
