Please ensure Javascript is enabled for purposes of website accessibility

Why Shares of Plug Power Are Tanking Today

By Scott Levine – Nov 3, 2021 at 11:51AM

Key Points

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

Results from the ballot box are inspiring a sell-off today.

What happened

After an auspicious beginning to November, shares of Plug Power (PLUG -2.85%) are headed south today. Why are investors turning a cold shoulder to the fuel cell specialist? It doesn't seem to be any company-specific news or commentary from analysts, frequent catalysts for the stock's rapid rises and downturns. Instead, investors seem to be responding to the results from Election Day.

As of 11:29 a.m. EDT, shares of Plug Power had dipped 2.3%, recovering from their earlier slide of 6.3%.

A businesswoman looks at a chart on a computer.

Image source: Getty Images.

So what

Waking up to election results from yesterday's contests, investors are learning that Republican candidates gained in favorability among voters. One race in particular that had drawn national attention was the governor's race in Virginia, which many pundits had seen as a possible harbinger of how the midterm races will swing in 2022. Why does it matter for Plug Power investors? One of the main driving forces behind the stock's recent rise is President Biden's infrastructure bill, legislation that the market recognized as a positive for the burgeoning hydrogen economy.

The bill, however, has failed to overcome opposition in the House, and investors are now likely worried that it stands even less of a chance of making it to President Biden's desk, or if it does, it will be a watered-down version that is not as beneficial to hydrogen-oriented businesses like Plug Power as the first iterations of the bill were.

Now what

While shares are tumbling today, it seems more like an overreaction instead of a valid response to concerning news. Nonetheless, investors who had been waiting on the sidelines for the stock to dip before beginning a position should continue to stand pat. Speculation is extremely high that this niche renewable energy stock will deliver on its ambitious growth projects, and unless investors have a sizable tolerance for risk, this stock is probably better left out of their portfolios at this time.

Scott Levine has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Premium Investing Services

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