What happened
Yesterday, Plug Power (NASDAQ: PLUG) skyrocketed 35%. Gains continued today with shares rising 11% more as of 2 pm EST.
The 50% jump in the past two days is still small compared to the nearly 1,600% increase in shares since the beginning of 2020.
And
The recent outbreak was triggered by the announcement of a new strategic agreement with SK Group of South Korea that will inject $ 1.5 billion into the company in exchange for a 10% stake in SK Group.
Image source: Getty Images.
The partnership plans to “supply hydrogen fuel cell systems, hydrogen fueling stations and electrolysers to the Korean and Asian markets”.
What now
More support for the sector came in recent days, when Georgia’s runoff elections cemented Democratic control of both houses of Congress. Investors believe that federal support to help build a green energy infrastructure is now more likely.
But the exaggerated gain in shares last year also came with dilution of shares for investors.
PLUG data by YCharts
Outstanding shares grew by more than 40% as they increased to their current market capitalization of more than $ 20 billion. For an unprofitable company, this is an assessment based only on potential. But the potential market can be huge. Investors are expected to monitor Plug Power’s next business update on January 26 to see if it can provide a current timeline towards profitability and decide whether the valuation appears justified in this rapidly changing industry.