After taking some hits last week, Plug Power (NASDAQ:PLUG) is back in the green today in more ways than one. Recently, the hydrogen fuel cell company launched what it describes as the “largest liquid green hydrogen plant in the U.S. market.” This news has sent PLUG stock surging and, despite some early morning volatility, shares remain highly elevated as momentum builds for the development.
Plug certainly needed a positive catalyst after news of a new stock offering pushed shares down last week. Now, the company has proven that investors shouldn’t count it out just yet, even as it faces an uncertain industry landscape.
Does this mean that PLUG stock is out of the woods and can start making up lost ground? It’s hard to say for sure, but this development warrants a closer look. Let’s dive in.
What’s Happening With PLUG Stock?
While it has experienced some turbulence today, PLUG stock has enjoyed an overall excellent morning. As of this writing, shares are up more than 15% for the day. For all the volatility the stock experienced last week, Plug Power seems to have reversed course. Indeed, previous short interest may be cooling slightly, as evidenced by data from short analysis platform Fintel.
There’s no denying that the opening of Plug’s new facility represents a key step forward for the company. The new facility is located in Woodbine, Georgia and will feature the electrolyzer technology that has helped Plug gain its share of the hydrogen fuel cell market. Specifically, the plant will allow for the daily production of 15 tons of liquid electrolytic hydrogen. For context, Plug describes this as enough energy “to power approximately 15,000 forklifts per day.” As the company states in its press release:
“This new facility will bolster Plug’s supply of liquid hydrogen currently being delivered to Plug’s pedestal customers for material handling operations, fuel cell electric vehicle fleets, and stationary power applications. Liquid hydrogen production, in addition to the on-going gaseous hydrogen production, is expected to positively impact Plug’s bottom line and provide an additional step change in fuel margin expansion.”
This expansion is made possible in part through a funding package of over $1 billion from the U.S. government. And the company is just getting started. On a recent investor call, Plug Power CEO Andrew Marsh stated that this new loan “will support the development construction and ownership of up to six hydrogen production facilities.” Marsh also added that the company is making progress on its Tennessee plant.
What Comes Next?
After sliding more than 70% over the past six months, Plug Power has a lot of ground to make up. It’s understandable that some investors may approach the company with skepticism, given its questionable performance. That said, news like the Georgia plant development is exactly what PLUG stock needs if it is going to pull back above penny stock price levels. If the six plants that Marsh mentioned are indeed opened, the company could be in an excellent position.
For investors who can stomach some risk and don’t mind being patient, PLUG stock’s current low price around the $3 mark could make for a tempting point of entry before this new momentum takes shares higher.
On the date of publication, Samuel O’Brient did not hold (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.
