If you talk to the management team of hydrogen fuel pioneer Plug Power (PLUG 10.47%), they'd tell you that the company's best days are ahead of it. To replace a global economy built on fossil fuels, it's possible that hydrogen demand will skyrocket over the next few decades. Plug Power appears to be in a good position, with the initial infrastructure already in place to meet this growing demand, not to mention a history of success securing government subsidies to make its technology more cost competitive.
You may think a company exposed to a massive, multidecade growth opportunity like this would have been treated well by the market. Prepare to be surprised.
This is how much you would have made by investing in Plug Power stock during its IPO
Plug Power went public on Oct. 29, 1999. At that time, the stock was valued at roughly $15 per share, giving the company a market cap of around $1 billion. Shares initially spiked based on optimistic expectations for hydrogen demand -- not dissimilar to today's rosy projections for hydrogen demand -- assigning Plug Power a $6 billion valuation in early 2000.
Then came the dot-com crash. And it's been a long downward trend since then.
PLUG Total Return Level data by YCharts
If you had held on to your shares since the IPO date in late 1999, you would have lost nearly 99% of your initial capital. The company went through a 1-for-10 reverse stock split in 2011, so for every 10 shares you owned before then, you'd have just 1 share today. Every share bought at the IPO would represent just 0.1 shares today, worth $0.23.
Unfortunately, Plug Power still faces the same challenges that have pressured its stock price for decades. Building out the infrastructure necessary for a hydrogen-based economy is extremely capital intensive. Most forms of hydrogen power still aren't economically competitive with fossil fuels or even other renewable energy sources. Plug Power therefore remains a money-losing business, forcing it to heavily dilute shareholders on a regular basis in order to raise cash.
