What happened
Rebounding yesterday after slipping lower on Tuesday, shares of Plug Power (PLUG -5.25%) seemed to be on the verge of logging a second day of rising this morning. The fuel cell specialist's stock popped this morning, climbing as much as 4.6% on seemingly encouraging news regarding the company's expansion into a new industry.
But the climb didn't last long. After digesting news of the deal, investors became less enthusiastic, and the stock reversed course. As of 11:21 a.m. ET, shares of Plug Power are down 4%.
Image source: Getty Images.
So what
Setting its sights on Asia, Plug Power announced today that it has signed an agreement with Edison Motors, a South Korean electric car manufacturer, to develop and commercialize fuel cell-powered electric city buses. After they develop a prototype in the second half of 2022, the two companies expect to bring the product to the South Korean market in the first half of 2023.
Electric buses may just be the beginning of a beautiful friendship. Speaking to the newly forged partnership, Young-kwon Kang, chairman of Edison Motors, said, "The fuel cell electric city bus project is just the beginning of strategic cooperation between Edison Motors, and Plug Power," adding that "In the future, we hope to partner on other mobility applications including trucks, vessels, drones, and PAVs. We believe that our combined technology and know-how in electric buses will position us to sell fuel cell-powered electric buses not only in Korea but also in other overseas markets."
Now what
Those familiar with Plug Power will recognize today's swing and dip with the stock as par for the course. The company has a long track record of announcing promising deals but failing to deliver specific financial details of the partnerships. While the new deal may help Korean city dwellers get around town with the help of Plug Power's fuel cell engines, it's unclear whether the company will be able to recognize a profit from the endeavor. If you were long on Plug Power yesterday, nothing should change today, but growth investors looking for less risk should look elsewhere.
