Today, investors in FuelCell Energy (NASDAQ:FCEL) and FCEL stock are seeing a lot of green on their screens. Indeed, shares of FCEL stock are currently up more than 15% at the time of writing on heavy volume.
Today’s move is a reversal of a relatively robust trend that has been in place over the past six months. Indeed, since hitting a high of nearly $30 per share earlier this year, FCEL stock has lost more than 75% of its value since its peak.
There are a number of reasons for this move. Hydrogen fuel cell stocks initially moved on expectations of widespread government funding for this sector. President Joe Biden’s American Jobs Plan did carve out some funding for this sector. However, investors appear to have refocused their energy on battery electric vehicle (EV) options and other clean energy plays of late.
However, today, FuelCell has a specific catalyst that is taking its shares higher. Let’s dive into what was announced and why investors are getting excited about FCEL stock today.
FCEL Stock Higher on Financing Deal
Today, FuelCell Energy announced the company has closed a $15 million tax equity financing transaction with East West Bank. This deal provides for 7.4 megawatts of fuel cell energy to be provided to the U.S. Submarine Base in Groton, Connecticut.
Any deal is a good deal for investors in FCEL stock. And while this deal is small potatoes relative to the company’s $2.3 billion market cap, it’s a step in the right direction. The company believes “this commitment further demonstrates the market’s interest in financing FuelCell Energy’s distributed sustainable energy platforms as the Company works with customers to achieve their decarbonization and enhanced grid resiliency goals.”
It appears investors agree with this sentiment.
Additionally, the use of tax equity financing is being touted as an efficient way for FuelCell Energy to retain a majority of this project’s cash flows, while opening up additional opportunities to enhance the overall return of this project over time. Indeed, should FuelCell Energy continue to commercialize its proprietary state-of-the-art fuel cell platforms in novel ways, investors stand to benefit from such deals over time.
On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.