Power Plug (PLUG) Up on Prospect of Major Deal
Shares of Latham, NY, based Power Plug Inc. (PLUG) surged on Tuesday, against the backdrop of a strong day in stocks overall. The company's stock was up $2.79 per share, or 49.03%, to $8.48, on volume of 135,458,814 shares. The company's chief executive revealed that the company is close to announcing a major deal in the next few weeks.
The surge in Power Plug's stock spilled over to other fuel cell related stocks, resulting in a strong performance by the sector overall.
Power Plug Inc. provides alternative energy technology focused on the design, development, commercialization and manufacture of fuel cell systems for the industrial off-road market. The company develops and sells fuel cell products designed to replace lead acid batteries in material handling vehicles and industrial trucks. The company had a net loss of $62.7 million, on sales of $26.6 million in 2013. It's stock trades on the NASDAQ. Power Plug Inc. Chief Executive Andy Marsh reported in a telephone interview with MarketWatch that he will be announcing "a deal with a global automaker in two to thee weeks." The company has signed an order with an unnamed global automaker, with details to be released at a later date. Marsh confirmed only that the deal is "an additional order in North America with a global automaker." Power Plug also expects winning another deal related to its GenKey product line, sometime this year. The deal is expected to be similar to the one that it has already signed with Walmart (WMT
) to supply 1,738 fuel cell systems for forklifts in six regional Walmart warehouses. The company's three main product lines include GenDrive, which is a hydrogen fueled PEM fuel cell system that provides power to industrial vehicles. GenKey is Power Plug's "turn key solution making the transition to fuel-cell power seamless." It essentially makes customer's transition to GenDrive a smooth process. GenFuel is the design, procurement, commissioning and maintenance for all the components required to successfully dispense hydrogen inside new or existing facilities without disrupting the operation. Year to date, Power Plug's stock price is up more than 400%, on the heels of a 210% increase in 2013. But despite impressive stock performance, analysts remain concerned that the stock price is being driven primarily on speculation of major deals that have not yet become a reality. Citron Research analyst, Andrew Left, called Power Plug a "casino stock"
Published on Mar 26, 2014
By Kevin Mercadante