what happened
Shares of hydrogen fuel cell company Plug power (NASDAQ: PLUG) has had an amazing run over the past year – more than 15 times over 12 short months. That sounds like good news for the stock, but one analyst has another word for it: “absurd.”
In a series of tweets this morning, short seller Kerrisdale Capital Management has filed its case against Plug shares and it looks like it is already having an effect on the stock. Plug shares are down 6.5% from 11:30 a.m. EST. But what does this analyst have specifically against the company?
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Approximately
Kerrisdale today announced its short position in Plug stocks, warning that investors have invested their “hopes, dreams and delusions of the green hydrogen energy movement” in Plug stocks, but the ‘Hydrogen Economy’ is an aerial image. Referring to Elon Musk, a well-known critic of technology, Kerrisdale argues that “the world will * never * use ‘green’ hydrogen for energy. It’s too expensive and inefficient to make, store, transport and use ‘- and it’s a’ delusion ‘to think otherwise.
The world will * never * use meaningful “green” hydrogen for energy. It is too expensive and inefficient to make, store, transport and use. Just ask @elonmusk: https://t.co/fqUY3gDnqT. Li batteries are better in almost all use cases and their superiority grows every year (3/9)
– Kerrisdale Capital (@KerrisdaleCap) 20 January 2021
Now what
What is the future for Plug stock according to Kerrisdale’s estimate?
He points out that Plug gets 70% of its sales from just two customers, Amazon.com and Walmart, both of which “are encouraged to buy Plug equipment in exchange for cheap $ PLUG warrants,” the analyst believes the company may have problems with other customers willing to buy its products. without the warrants. At that point, the weakness of the business would become apparent.
Ultimately, Kerrisdale thinks that Plug inventory ‘is not worth $ 1 billion, let alone $ 40 billion’, and may even be right. It was not so long ago – February 2019 – that the whole power was power could purchased for less than a market capitalization of $ 1 billion.