Why Bloom Energy Stock Dropped 5% This Morning

What happened

Shares of fuel-cell company Bloom Energy (NYSE: BE), which enjoyed great popularity for much of last week after announcing plans to partner with a Korean company to produce hydrogen gas for use in fuel cells, took a sharp turn southward in Monday trading, falling more than 5% by 10 a.m. EDT.

Investors may be twigging to the fact that on Friday, Bloom Energy made a series of Form 4 filings with the SEC, advising that three top executives -- the company's chief operating officer, chief technology officer, and executive vice president of customer installations -- sold a total of 370,964 shares of common stock on July 15.  

Glowing red stock chart arrow trending down

Image source: Getty Images.

So what

Are these sales significant? Honestly, it's hard to say. SEC filings show that Bloom Energy execs routinely file a lot of Form 4s -- more than two dozen in the last three months -- both acquiring shares as grants and liquidating them to raise cash. Viewed in that context, the revelation of stock sales isn't really all that out of the ordinary. Viewed in the context of the shares' near-150% rise over the past three months, however, it may appear to some investors that insiders are cashing out and taking profits after the stock's steep run-up.

Such sales may be interpreted as implying that Bloom Energy's run-up in share price was unjustified.

Now what

In such a case, it's natural that the sales might make alternative energy investors nervous. It's also natural that they'd follow the lead of Bloom insiders and head for the exits today. The best thing Bloom could do to calm the market, I suspect, is a figure out a way to earn a profit from its business.

Unfortunately, according to analysts following the company, that's not likely to happen before 2023 at the earliest.  

10 stocks we like better than Bloom Energy Corp
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*

David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and Bloom Energy Corp wasn't one of them! That's right -- they think these 10 stocks are even better buys.

See the 10 stocks


*Stock Advisor returns as of June 2, 2020


Rich Smith has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


More Related Articles

Sign up for Smart Investing to get the latest news, strategies and tips to help you invest smarter.