Citron Hammers Fuel Cells -- Plug Power in Particular

Energy

Published: March 11, 2014 2:15 pm

Last Updated: March 11, 2014 2:45 pm

Apparently enough is enough when it comes to stocks experiencing exponential gains. Citron Research has issued a Stocklemon report on the high-flying Plug Power Inc. (NASDAQ: PLUG). Beware from here as well … Citron will be featuring its Stocklemon report case on CNBC shortly.

Citron warns investors that Plug Power is nothing more than a casino stock — worse than the cult stocks and dream stocks — and called this the “lowest form of a speculative moonshot” in the call. The valuation in the report was even put at $0.50 for a real value stock price.

What makes matters worse is that Plug Power just recently raised $22.4 million in a registered offering of 3.9 million shares at $5.74 per share. Plug Power shares hit a post earnings high of $11.72 on Tuesday, but after the Stocklemon report Plug Power shares are now down 12% at $9.00. UPDATED AT 2:42 p.m. EST: Plug Power shares are now down 32% at $7.02 on 170 million shares.

Ballard Power Systems Inc. (NASDAQ: BLDP) has fallen in sympathy, but it was mentioned in the report. The Citron Research said:

Who is behind PLUG, and what do they do? This is simple: Plug Power sells fuel cell-powered forklifts … with fuel cells they acquire from Ballard Power. Nothing fancy here, folks. Same business model since the 2000 crash … Well over a decade as a public company, during which they have lost close to $850 million, while developing no IP or meaningful revenue growth. Profitability? Forget about it!

Ballard Power is down 9% at $6.26, after hitting a new yearly high on Tuesday of $8.38. Ballard and Plug Power have seen their shares intermingled in the parabolic fuel cell run up. That being said, Plug Power was up the most and was the real target of the report. UPDATED at 2:42 p.m. EST: Ballard Power shares are down 21% at $5.39 on 63 million shares.

Don’t be too shocked if this sort of whippy trading kills some of the other speculative alternative energy stocks as well. These do not generally trade in a vacuum where the gains or woes are isolated, although that can happen around contract announcements.

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