What happened
Yesterday, shares of Plug Power (NASDAQ:PLUG) rocketed 35%. The gains continued today with shares up another 11% as of 2 p.m. EST.
The 50% jump in the past two days still pales in comparison to the stock's almost 1,600% rise since the start of 2020.
So what
The recent spurt was triggered by an announcement of a new strategic agreement with South Korea's SK Group that will inject $1.5 billion into the company in exchange for a 10% stake for SK Group.
Image source: Getty Images.
The partnership plans to "provide hydrogen fuel cell systems, hydrogen fueling stations, and electrolyzers to the Korean and broader Asian markets."
Now what
Further support for the sector has come in recent days as the Georgia runoff elections cemented Democratic control of both houses of Congress. Investors believe federal support to help build out green energy infrastructure is now more likely.
But the stock's outsized gain over the past year has also come with share dilution to investors.
Shares outstanding have grown by more than 40% as the stock rose to its current market capitalization of over $20 billion. For a still unprofitable company, that's a valuation based solely on potential. But the potential market could be huge. Investors should monitor Plug Power's upcoming business update on Jan. 26 to see if it can provide a current timeline toward profitability, and decide if the valuation seems justified in this fast-changing industry.
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January 09, 2021 at 02:12AM
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Why Plug Power Stock Continued to Climb Today - The Motley Fool
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