What happened
After an auspicious beginning to November, shares of Plug Power (PLUG 1.11%) 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%.
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.
