Shares of Plug Energy (PLUG -4.17%) jumped this week, up from final Thursday’s shut at 1 p.m. ET for the Fourth of July vacation by 17.5% as of 12:30 p.m. ET Friday. The spike comes because the S&P 500 (^GSPC -0.23%) and Nasdaq-100 have been each up 0.5%.
The corporate, which develops clear hydrogen energy, introduced earlier this week that it secured a vital new contract that may enhance money flows, one thing the struggling firm desperately wants.
Plug Energy has negotiated a brand new deal
The multiyear extension to its contract with a key, however unnamed, provider will present Plug Energy with hydrogen gasoline by way of 2030 at a diminished price. The cheaper gasoline will assist enhance Plug Energy’s money flows, which have been severely impacted by shrinking gross sales.
Picture supply: Getty Pictures.
Plug Energy pointed to President Trump’s One Large Lovely Invoice, now legislation, as a key a part of how the corporate was capable of negotiate such favorable phrases. In a press launch, the corporate stated that the “laws will present robust tailwinds within the close to and mid-term for added market progress. Plug’s expanded settlement with this associate highlights how robust U.S.-based industrial partnerships are advancing a home hydrogen financial system to help this ongoing progress.”
Nevertheless, Plug Energy is a danger
Plug’s financials are in dire form. The corporate’s gross sales have stagnated and even declined for a while as the corporate struggles to discover a true footing out there. For traders with a excessive danger tolerance and who’re keen to lose their whole allocation, Plug Energy might be a high-risk, high-reward speculative turnaround play. Nevertheless, I’d warning most traders to remain away.
Johnny Rice has no place in any of the shares talked about. The Motley Idiot has no place in any of the shares talked about. The Motley Idiot has a disclosure coverage.
