What happened
Ending yesterday on an inauspicious note, shares of Plug Power (PLUG 1.26%) are continuing their downward spiral today. News of the deal with MOL Group that the company announced yesterday continues to have investors scratching their heads.
As of 12:52 p.m. ET, shares of the hydrogen specialist haven fallen 6.2%.
So what
Unsurprisingly, the initial enthusiasm Plug Power investors expressed yesterday regarding the deal with MOL Group quickly faded. While the supply agreement -- which will see Plug Power supply MOL Group with a 10 megawatt electrolysis unit -- is an encouraging sign for the growing adoption of green hydrogen, investors are growing restless with Plug Power's inability to demonstrate that its fuel cell business can be a profitable endeavor.
Image source: Getty Images.
This concern likely resonated with investors yesterday and still today as they dig deeper into the news regarding MOL Group, learning that there was no information regarding financial details of the supply agreement. Investors, therefore, are probably correctly concluding that the deal will not contribute anything material to the company's bottom line.
Now what
Undeniably, there is growing interest in growing the presence of hydrogen on not only the American energy landscape, but the global one as well. Benefiting from the increasing enthusiasm, Plug Power has repeatedly announced deals that demonstrate how it has emerged as a leader in the field. The company, however, has consistently reported negative operating cash flow as well as a lack of profitability. So while deals like the one with MOL Group may inspire inexperienced hydrogen investors to click the buy button, savvy investors are losing patience and want to see the growth company enter a new phase in its development -- one of consistent profits.
