Plug Power's share price fell 6% on Thursday and slipped another 1% in after-hours trading following a Hindenburg Research-esque short seller report on the company from Kerrisdale Capital.
What they're saying: "We are short shares of Plug Power, a $40 billion provider of hydrogen fuel-cell solutions that’s set to generate a paltry $300 million in revenue in 2020 and trades at 40x its own aggressive revenue projection for 2024."
- "The company’s stock has almost doubled in just the last few weeks, and has risen by 15x in the last year, on the naïve excitement of uninformed investors over the prospects of the 'hydrogen economy,' or the idea that hydrogen and the fuel-cells (FCs) it can power will be a critical part of the transition from fossil fuels to 'green' energy."
- "But it’s all just a pipe dream, because 'green' hydrogen is too expensive and too inefficient to produce, store, transport, and burn."
The intrigue: In contrast to Hindenburg's scathing report on electric truck manufacturer Nikola, Kerrisdale doesn't allege that Plug is necessarily deceiving investors, just that for it to ever be profitable the company's technology would need to overcome the laws of physics.
Why it matters: While Nikola seemed to be a case of a company asserting its vehicles did things that they couldn't, Plug's seems to simply be a case of a company whose revenues and potential revenues don't justify its valuation.
- But the market has shown that in 2021 such concerns may be irrelevant.
- Plug is up 1400% over the past year.
Go deeper: A Short Seller Pans Plug Power Stock. But Wall Street Disagrees. (Barron's)