What happened
Monday opened lower for Nasdaq stocks once again, with the index down more than 1% -- and today it appears that the fuel cell stocks are leading this market lower.
As of 12:30 p.m. ET, shares of fuel cell pioneer Plug Power (PLUG -3.11%) are sliding 6.1%, followed by fuel-cell-powered semitruck company Nikola Corporation (NKLA -2.08%) with a 7.1% loss, and stationary fuel cell power specialist Bloom Energy (BE -3.22%) with a loss of 9.3%.
Image source: Getty Images.
So what
And yet, it appears that another company entirely -- fuel cell peer Ballard Power Systems (BLDP -1.90%) -- may be partly to blame for these losses.
Ballard decided to report its fourth-quarter 2021 earnings very late on Friday evening -- at 11:30 p.m. on the weekend -- and the news was not good. As the company reported, despite selling more fuel cells than planned in Q4, Ballard suffered much steeper losses than anticipated -- $0.15 per share, instead of the $0.06 per share loss predicted by Wall Street analysts.
For the full year, losses were more than twice that -- $0.39 per share. Sales increased 28% year over year in Q4, but despite management saying it made "significant progress against our strategic plan," sales grew only 1% for the full year. Furthermore, Ballard's gross profit margin was cut by 700 basis points to just 13% for the year. Add in higher operating costs -- up 68% year over year, or twice the rate of sales growth even in Q4 -- and it's easy to see why losses ballooned.
Now what
Ballard warned that it will "increase investments" even further in 2022 -- spending as much as 57% more as operating costs surge from $102 million last year to anywhere from $140 million to $160 million this year. Management did not, however, promise that revenue will grow at anywhere near the pace of costs, which naturally raised questions as to whether investors should expect losses to grow even greater in the fuel cell sector in 2022.
Indeed, seeming to confirm these fears, Nikola poured salt in the wound Friday, filing a prospectus with the Securities and Exchange Commission (SEC) advising that one of its shareholders, Tumim Stone Capital LLC, plans to resell some 17 million shares of Nikola, worth roughly $120 million at current prices. None of this money will go to Nikola, but the company reminded investors that it is itself continuing to sell shares directly to Tumim (which appears to be turning around and reselling them, presumably at a profit for itself) in order to raise as much as $300 million in cash for its own operations.
It all gives the impression of a lot of investor money being poured into fuel cell stocks -- the prices of which nevertheless continue to tumble.
