Plug Power Inc (NASDAQ:PLUG): Is It A boom And Bust Company?

Alan Masterson - March 12, 2014

Boston, MA 03/12/2014 (wallstreetpr) – Investors of Plug Power Inc (NASDAQ:PLUG) have hammered the company’s stocks after an analyst raised doubts about the company. Though the company has several postives, doubts remain about the economic viability.

Boom or Bust?

Plug Power Inc (NASDAQ:PLUG) was till recently doing very well on the markets; it had managed to post impressive gains. However, a report by Citron Research calls the company a casino stock. It says that that the company has nothing to offer and the gains have been largely speculative in nature. Fuel cells companies have been in news recently as there is a trend of adopting cleaner technology to fuel vehicles. Companies like Tesla Motors Co (NASDAQ:TSLA) have posted impressive returns and have also acquired a fan following. However, doubts have been raised about Plug Power.

Any Positives:

The timing about the report is also surprising. Plug Power Inc (NASDAQ:PLUG) has just raised about $22.4 million in a registered offering. The company offered 3.9 million shares at $5.74 per share. However, the company has many positives also. It recently announced a deal with Wal-Mart Stores Inc (NYSE:WMT)for the supply of 1,738 GenDrive fuel cell units. These units will be deployed across the six distribution centers across North America. The deal also encompassed service agreements for the next six years. It is expected that Wal-Mart will be able to lower its carbon footprint.

However, several analysts have raised issues about the company’s business model as Plug Power Inc (NASDAQ:PLUG) has not acquired any substantial Intellectual Property during its business operations.

Such companies have also benefitted from the plans of Tesla Motors. Tesla has announced plans to establish a mega factory for the manufacture of batteries by 2017. It is assumed that Tesla will be able to expand the usage of batteries and fuel cells to other sectors. The size of the unit is so big that the production capacity will be equal to the total global production of batteries in 2013.

Alan Masterson

Alan has over 25 years of trading experience in the U.S. equity markets. He began his career in finance working on a program trading desk specializing in over-the-counter stocks. His career progressed from that point to his current position as senior trader on an institutional trading desk. In the evenings, Alan teaches economics at a local community college. He has contributed articles to various publications over the last six years, including feature articles for an economics magazine and various financial blogs. You may contact Alan via his email (alanmasterson@wallstreetpr.com) or his Google+ page (https://plus.google.com/103338576216002376250).

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