What happened

After heating up in August -- a month in which they soared 26% -- shares of Bloom Energy (BE) cooled off in September. While the S&P 500 sank more than 9% last month, Bloom Energy's stock plummeted 21.3%, according to data from S&P Global Market Intelligence.

In addition to the distance that investors looked to keep, in general, from growth stocks like Bloom Energy, the trimming of insiders' positions contributed to the stock's fall last month.

So what

Looking to tamper rising inflation, the Federal Reserve has resorted to repeatedly raising the interest rate. That action led many investors to turn their backs on speculative investments like Bloom Energy in September. Although the company has steadily grown revenue -- increasing it at a compound annual growth rate of 28% since 2017 -- it has failed to achieve breakeven on the basis of earnings before interest, taxes, depreciation, and amortization (EBITDA).

And it's not as if management is providing any assurance that profitability is on the horizon. During an investor presentation on Sept. 9, Bloom Energy lauded its success in growing its non-GAAP gross margin from negative-3% in 2017 to 22% in 2021, yet it failed to offer any insight into when management expects to achieve other degrees of profitability like an operating profit, EBITDA, or net income.

Two insider transactions represented another catalyst for the stock's sell-off last month. On Sept. 19, Bloom Energy reported that KR Sridhar, the company's founder and CEO, as well as Shawn Soderberg, an executive vice president, both sold shares last month. Sridhar sold 11,500 shares, netting himself about $283,000, while Soderberg sold 3,345 shares in a transaction valued at about $82,000.

This is the second time in as many months that the two insiders have winnowed their positions. In August, Sridhar and Soderberg reported selling 8,500 shares and 3,192 shares, respectively.

Now what

While fuel cell companies have made tremendous strides in growing their businesses, they have largely come up short of proving that the fuel cell enterprise can be a profitable one. And while Bloom Energy has come closer to reporting a profit than its peers have, the rampant fear in the markets has unsurprisingly led many toward more defensive investments -- not speculative ones like Bloom Energy.

With regard to the insider selling, however, it can be disconcerting to see executives reducing their positions in the company, leading to the speculation that they know something the public doesn't. This is not necessarily the case, though. There can be a variety of reasons insiders sell shares -- not merely that they foresee the company's stock heading lower.