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Why Shares of Plug Power Are Tanking Today

By Scott Levine – Dec 20, 2021 at 9:07AM

Key Points

  • With the numbers of daily new COVID-19 cases rising rapidly, investors are growing worried that the U.S. may be headed for a return to lockdowns.
  • Passage of the Build Back Better Act seems like an impossibility at this point.

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It's not only the spread of the omicron COVID-19 variant that has investors worried about the fuel cell industry.

What happened

Investors are finding red across the board Monday, and Plug Power (PLUG -4.54%) has hardly been impervious to the selling pressure. As of 12:56 a.m. ET, shares of Plug Power were down by 7.8%.

Investors seem to be particularly concerned about how the spread of the omicron COVID-19 variant will impact the fuel cell company, as well as news out of Washington regarding President Biden's Build Back Better plan.

A businessman holds his head while sitting in front of a laptop.

Image source: Getty Images.

So what

Like so many countries around the world, the U.S. is experiencing a sharp uptick in the number of new COVID-19 cases being diagnosed, both due to the omicron variant and an ongoing delta-variant surge. Unlike several European nations, however, the U.S. hasn't reimposed the types of lockdown measures that were implemented during the early phase of the pandemic. But the possibility that the Biden administration will put such restrictions in place may have investors worried that Plug Power's growth plans -- such as those related to a deal it announced last week -- will be hampered.

Also, investors may be exiting positions Monday in response to news that the Build Back Better Act, which would likely be a big catalyst for clean-energy growth, seems unlikely to pass the Senate in its current form. Although the House of Representatives passed the bill in November, Sen. Joe Manchin of West Virginia revealed over the weekend that he doesn't intend to vote for it at its current size, suggesting that the Build Back Better plan will not make it to President Biden's desk.

Now what

Projecting significant growth over the next few years, management has excelled at stoking investors' belief that Plug Power will play a pivotal role in the emerging hydrogen economy. While the nation may go through another period of lockdowns and the Build Back Better plan may be stymied, these undesirable factors are unlikely to prevent Plug Power from advancing its plans. That being said, plenty of risks remain for the renewable energy company, so investors who tend to favor more conservative stocks may want to look elsewhere. 

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.

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