For a no-news day for alternative energy stocks, there sure is a lot of price movement in shares of hydrogen fuel cell stocks Bloom Energy (NYSE: BE) and Plug Power (NASDAQ: PLUG) today. For that matter, alt-energy newcomer and SPAC stock Pivotal Investment Corporation (NYSE: PIC) is making a pretty big move as well -- but there doesn't seem to be a lot of agreement regarding the directions these prices are moving.
As of 12:25 p.m. EDT, shares of Bloom are up 2.9%, but Plug Power, its archrival in the burgeoning field of hydrogen gas production, is down 4.7%. And Pivotal, the latest company aiming to bring an alt-energy company public through a reverse merger IPO, is surging a strong 10%.
Let's see if we can make any sense of this mess.
First things first: To set your mind at ease (or perhaps inject a note of caution, depending on which of these stocks you might own), there appears to be no news driving the stock prices of any of these three stocks today -- up or down.
Rather, other forces seem to be at work.
With Plug for example, we're looking at a fuel cell company with no history of profits trying to convince people that cars are better fueled with hydrogen gas than with electricity from batteries. In a world where electric car stocks are all the rage, that's going to be a hard sell. Although Plug management continues to promise that it will become profitable, at last report it wasn't expecting that to happen before 2024. In the middle of a recession, with unprofitable companies going bankrupt left and right, investors may not be too interested in waiting around that long if Plug can't deliver profits today.
At Bloom Energy, the story is similar -- but also arguably better. On the one hand, yes, Bloom's stock remains as deeply unprofitable as Plug's when profits are calculated according to generally accepted accounting principles (GAAP). On the other hand, though, Bloom did generate positive free cash flow last year, and it remains cash flow positive to this day, despite the ongoing recession. This, combined with a positive analyst report on the stock just last week, seems to be maintaining Bloom's momentum into Monday.
What about Pivotal Investment Corporation?
No profits here, of course, nor free cash flow either. That's not surprising given that Pivotal Investment isn't really an operational business at all, but rather a shell company whose entire purpose is to find an operating business, buy it, and bring it public. Until that happens, there will be little anyone can say against Pivotal as regards the company's profitability or lack thereof. Instead, investors are likely to focus on the fact that the SPAC has a market capitalization of less than $400 million -- but is telling investors that once it completes its reverse merger with XL Fleet next quarter, its value will rise to $1 billion.
That prospect of an immediate 150% return on investment is bound to whet investors' appetites -- even on a down day for the stock market like today.
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