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Why Plug Power, Bridgepoint Education, and Nuverra Environmental Solutions Plunged Today

By Dan Caplinger – Mar 11, 2014 at 8:31PM

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Loss of momentum from some high-flying stocks took the broader market down modestly, but these three stocks were among those taking the brunt of the bearish sentiment today. Find out why here.

Tuesday brought further losses to the stock market, with somewhat steeper and broader-based declines than investors saw on Monday. Even though most major-market benchmarks lost only about half a percent, the brunt of the selling pressure seemed to center on some of the best-performing stocks in the recent past. Among the stocks that performed the worst today were Plug Power (PLUG 2.41%), as well as Bridgepoint Education (ZVO) and Nuverra Environmental Solutions (NESC).

Plug Power plunged more than 40% after becoming the latest target of Citron Research, which penned a report that questioned the fuel-cell systems company's business model and suggested that the stock's fair value was just $0.50 per share. The report described a long history of statements from CEO Andy Marsh relating to unit sales that turned out to be overly ambitious, and pointed to large and in hindsight ill-timed offerings of shares and convertible securities at very low prices. Ballard Power Systems (BLDP 3.66%), which has a closer relationship with Plug Power, also fell hard on the news, losing more than a quarter of its value. FuelCell Energy (FCEL 1.06%) was also a victim of the dour view of the industry, falling 17% despite initially rising after reporting earnings last night that included a 22% jump in sales.

Bridgepoint dropped 16% as the for-profit educational company fell well short of investor expectations in its latest earnings report. Revenue fell by almost 22% on an identical percentage drop in total student enrollment at Bridgepoint's Ashland University and University of the Rockies. Despite an encouraging increase of about 10% in new-student enrollments, the company's loss defied expectations of a small profit for the company. Other for-profit educational institutions fell in sympathy, and it's clear that the challenges for the industry are far from over even though hopes for a turnaround have gotten more frequently lately.

Nuverra slid 15% after the company's earnings release last night. Revenue for the unconventional oil-and-gas environmental services specialist fell by about 5% sequentially from the third quarter, as tough weather hurt the company. In addition to earnings, Nuverra announced it would sell its Thermo Fluids division to VeroLube for $175 million, with all but $10 million coming in cash. Investors might not have been thrilled with the sale, simply because the price represents a $70 million loss compared to what Nuverra paid for the business just two years ago. Yet Nuverra's sale is part of its broader strategy to focus on its shale-play environmental solutions business, and many believe that a more focused approach should bring better long-term results for the company. With Nuverra also having resolved some other old issues, including settlement of class action litigation and a transition in the board of directors, the stock could rebound eventually from today's losses.

Dan Caplinger has no position in any stocks mentioned. The Motley Fool owns shares of Bridgepoint Education and Nuverra Environmental Solutions. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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