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Why Things Just Went From Bad to Worse for Plug Power
Stock
12
May
2023
By
Louis Navellier
Don't throw your hard-earned money at PLUG stock until
you read this
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Plug Power (PLUG)
has decided to jump into the electric vehicle (EV) charging market.
-
While it sounds promising at first glance, this
new venture could end up causing problems for Plug Power.
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Investors should remain wary of
PLUG stock in 2023.
![](images/images_06_26_2023/plug-1600-768x432.png)
Source: Postmodern Studio / Shutterstock
Previously, we warned you about the never-ending
plunge in Plug
Power (NASDAQ:PLUG)
stock. Could an already bad situation get even worse? It’s possible,
as Plug Power is suddenly dipping into an electric vehicle
infrastructure niche market. This could be a major failure for a
company that can’t easily afford to fail.
Eager traders are constantly on the lookout for
recent developments and bold ventures. Sometimes, however, it’s better
for certain companies to just stay in their lane.
Don’t confuse activity with progress. Plug Power
might tout its recently announced business venture, but this doesn’t
mean it’s a smart move. In the final analysis, Plug Power stock
traders should think about whether the company’s foray into a crowded
market is worthwhile or just hasty.
PLUG |
Plug Power |
$9.13 06/26/23 |
Don’t Get Charged Up Over PLUG Stock
So, here’s the supposedly big news. According to
a press release, Plug Power seeks to delve into the business of charging
commercial EVs. As you might expect from hydrogen-focused Plug
Power, the company plans to use a “clean hydrogen-powered fuel cell
system” to achieve this.
Let’s be frank about this. There are plenty of
businesses out there already, including some publicly traded ones,
that are already in the EV charging business. Plug Power won’t be a
first, second or third mover in this highly competitive field.
Plug Power General Manager of Applications and
Global Accounts Jose Luis Crespo promised that this “will be a game
changer for the EV industry.” But then, if you’ve heard this type of
hype again and again in corporate press releases, you’ll know that
actual “game changers” in the EV market are few and far between.
PLUG stock traders didn’t seem too impressed with
the announcement. The Plug Power share price didn’t make a big move in
the days following the press release, so investors are evidently
apathetic about the company’s new business concept.
Plug Power’s Big Unanswered Question
It’s no secret that Plug Power has been
unprofitable for a long time. The company certainly doesn’t have a
stellar track record for earnings
beats versus misses.
We’ve also discussed Plug Power’s cash
burn, which has been an ongoing concern for the company and its
stakeholders.
So, instead of getting overly excited about Plug
Power’s foray into the ultra-competitive EV charging industry,
prospective investors should ask a crucial question: How much is this
going to cost Plug Power?
It’s a highly relevant question, given Plug
Power’s less-than-ideal financial situation.
Then, we can consider a follow-up question: When
does Plug Power expect to turn a profit from this new venture? We’ll
save you the time and effort of trying to hunt down Plug Power’s
responses to these vital questions. The company didn’t provide any
financial figures, or even ballpark estimates, in its press release.
Plug Power Stock Looks Risky Now
Plug Power stock has lost substantial value over
the past couple of years. So, it’s understandable if some investors
are eager for news – anything that might seem like a positive catalyst
is welcome.
Yet, not all new news is necessarily good news.
Plug Power isn’t in a good financial position to spend large amounts
of capital on risky ventures. There are already multiple players in
the EV charging infrastructure field with established networks.
Plug Power already had an unfavorable
risk-to-reward profile, and it might have just gotten a lot worse.
Therefore, you don’t have to succumb to the temptation to jump into
the trade now with PLUG stock.
On
the date of publication, neither Louis Navellier nor the InvestorPlace
Research Staff member primarily responsible for this article held
(either directly or indirectly) any positions in the securities
mentioned in this article.
Green Play Ammonia™, Yielder® NFuel Energy.
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www.exactrix.com
509 995 1879 cell, Pacific.
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