Hard move. Big day above $5 for PLUG. Likely continues. Weekly chart - One more long white soldier to make it three possibly.
Glad you created an advantageous position for yourself post - R/S into this run. Glad what I've written contributes to a perspective and position you already have. Impressive.
Good man, highlow. You're right on target.
Agree with you fully. In the context of 2000 and the collapse of 2007-2009, points to a generational disruption to many fundamental stories that are just recovering, and in that context, as you reference, these are really stories of reflation into accelerating growth (and they become global growth stories, possibly, out of the ashes.
The R/S destroyed shareholders who'd ridden down the pps since the Millennium range highs after it had come public in 1999. A fundamental story and financial/revenue story in suspension or continuing to deteriorate in the context of an r/s is negative, and that was the outcome, but if you read the entire thread, this is a POST-R/S story of opportunity.
Raised guidance, profitability in 2014, accelerating revenue for products and service, strengthening margins, lower costs for product (reduced by 30% in 2011 new GenDrive), capital stability, likelihood of new credit facility re-activated and announced in 1st Q 2014, Gillette Model (transparent, stable, and pointing to incremental climbs off of established and accelerating product base, with servicing contracts in perpetuity), partnership in Europe representing a global market revenue stream BEYOND what's being established domestically; Government subsidized R&D funding to observe commercial applications of this technology....The number of catalysts contributing to Plug Power's future are adding up and gaining momentum.
That's post Reverse Split. It was a 10-for-1 so divide the adjusted historical chart by 10 and that's the actual historical price of PLUG PRIOR to the Reverse Split. 100+ were the highs after it came public -
-This is the playing field and the recent history. In this context, Plug Power has rebuilt its fundamental leverage, yet, technically, the share price is JUST BEGINNING a reflation above the Reverse Split range of 2011, but even with the Secondaries, including the capital raise at $3, the Outstanding Share count is still well below where it was at the time of the r/s, so a restoration of the market cap of PLUG prior to all of this acceleration in revenue and new contracts of SCALE since there are STILL fewer shares means a much higher share price.
Hope this contributes to some perspective and puts some of the disparaging commentary to rest.
- Prior retailers were utterly destroyed, suffered losses, and multi-year opportunity cost. Retailers in post - r/s have done extraordinarily well. Underwriters/institutions who were involved with the Secondaries since the r/s have done extraordinarily well. The company has been capitalized and there are still fewer Outstanding Shares NOW - will all of the pejorative commentary regarding dilutive financing - than prior to the r/s, and they are capitalized with accelerating orders and a rapidly expanding revenue stream because of all of their TACTICAL PLANNING into this post - deflationary domestic and global post-2009 economic recovery. Extraordinary story.
- Lastly, the limited privately-placed recent Secondary at $3 ($30M USD) w additional warrants, exercisable immediately at $4/share, strengthened the support level at $3 (50% Fibonacci level between $5 and $1), which contributed to this second run off of the bear - raid lows of the $2.20s last month to test the $4.90 recent high, which based on the second wave of extraordinarily high volume for PLUG historically (4 days this week), means that the resistance level at the r/s conversion high (let's say $5) has a much higher support level below it, pointing to a substantially higher range in the pps possibly.
- Here's how it connects to the movement in PLUG the last 3 months. The r/s was roughly near $5/share (from .50) and $4.90 is the high the last 3 months, so on a return to that level, anyone who still held, saw that as a break-even pre-r/s position EXIT (disregards their actual entry point prior to r/s) and it therefore logically had been resistance on the first climb.
Again, underwriters (and/or prop desks recognizing the r/s as a de-listing emergency measure that set up the continuing fall in the share price) shorted it from the $5 + level INTO the r/s. And again, the Secondary shares sold at .54 and again at .13 (40-50M shares total) explains partially the extraordinary surge in the share price on the first run, and it explains that this was also a full reflation story in market cap WITH FEWER SHARES OUTSTANDING post r/s even with the newer Secondaries! Because of the r/s, retailers in prior to it, were coming back to the value of their shares INTO the r/s. It was a sell point at $5! retailers in AFTER the r/s who came in after the two Secondaries, have been up 1000s of %, so logically, for many, after the run to $5, the hard retracement to the $2.20s freed up many shares the market makers wanted back into this second and definitive run, in which the structural technicals have been fully re-built for a run through the r/s level, and thus, a break well above $5/share (from a technical point of view, not necessarily an argument of valuation or market cap, but based on growth rates, the argument can be made for a substantially higher market cap and valuation IF they raise guidance again in 2014).
- What this means is that retailers who held through the r/s (let's say 1000 shares @ .50 became 100 shares @ $5) then saw the value per share drop to .13, which means the position at .13 was worth roughly 2 1/2% of the value of the position at $5 post r/s. This fact, in the context of the underwriters shorting PLUG to the lows into and through the r/s, in the context of Plug Power being forced to raise money at the edge of oblivion (but remember, they had decreased the share count to 1/10th of what it had been, so by sacrificing a decade of positions/ equity value, they had created a reflation vacuum in the Outstanding Shares that really represented a TRANSFER of capital from retailers to themselves through immense profit incentive to underwriting institutions and which to this day, represents a reflation of the market cap back to levels still well below where it was into the r/s as even with all of the share dilution, the Outstanding Shares are still well below its count prior to the r/s!).
- Here's where it gets interesting and relevant to today's price action on a technical level. In October, 2011, 5 months AFTER the r/s (which saw the further obliteration and continuing descent of the pps), Plug Power introduced its NEW GenDrive Products with a simplified architecture, less parts, and fitted to accommodate existing battery dimensions for potential broad market and universal re-fitting in off-road applications. It changed the trajectory of their access to the commercial market in terms of feasibility of transition on a level of scale that hadn't existed before. Then, in September 2013, they did a Secondary of 20M + shares (including over-allotment ) at .54/share - The share price continued to fall to .13/share and in February, 2013 (1 year ago), again, with warrants, an aggregate number of shares nearing 24M shares at .15/share were sold to the designated underwriter with those existing warrants exercisable immediately! And, 1,891,000 shares (warrants) would be exercisable on February 13, 2014 (two weeks ago).
- In May, 2011, PLUG - unable to maintain a share price at the time above $1/share had been given its last de-listing notice extension by NASDAQ - did a Reverse Split ( 10 - for- 1, meaning while their market cap stays the same of course, but that they would reduce the Outstanding Shares available to 1/10th of that number and they would increase the share price by 10). The share price at the time was roughly .51/share. So Outstanding Shares were divided by 10 and the share price was raised to roughly $5 / share ( the pps actually started to fall from above that level and then through it during those several weeks as the market KNEW the pps would drop from the NEW Reverse Split price because the fundamentals and financials for PLUG were not improving. They were worsening.). For the sake of argument, any retailer owning shares at that level on the announcement of the r/s (imagine for those holding shares that had bought when PLUG was 100/share around the Millennium window! They were beginning with a destroyed position into the r/s already! 100/share to .50/share -) ended up with 1/10th the number of shares w a share price value of $5 that was then clearly shorted from there all the way to .13/share by underwriters and prop desks while retailers continued to see the value of their position obliterated.
- Air Liquide (Axane is the subsidiary) invested $6.5M for 55% stake in a Joint Venture w Plug Power to develop Fuel Cell Commercial Market (HyPulsion) in Europe. They also recently paid $3.5M to increase their stake to 80% but there are terms built into the agreement for PLUG to buy back stake later as an option. Plug Power invested no money, but essentially, it's aright to their technology. Also, I read that Air Liquide will make "additional fixed cash contributions in 2013 and 2014 " (another catalyst).
-No legal proceedings (None).
Now, here's some information that is relevant to the Reverse Split, the price action since the r/s, in the interim, and into the extraordinary initial run these three months. It's important in my view in terms of what's ahead, and it's bullish. Here I'm going to combine some information I researched regarding the r/s with more information from the 10Q (and more recent financing activity added as well):
Read through the most recent 10Q, which was filed on 11/14/13 for the period ending 9/30//13, so the financial and fundamental story has accelerated since then into this 3 month run in the value of the stock as their story exponentially improves and becomes a hyper-promising growth story with profitability for the first time since they became a public company in 1999, but there's valuable information there that gives additional perspective, particularly in the context of the Reverse Split in May, 2011 -
A few notes (but including some of the events of the last 3 months) -
- In the context of their Accumulated Deficit ( vs. a positive Retained Earnings were it the case since being a publicly - traded company) of $820M, with the acceleration in product orders and service revenue, their assets vs. liabilities changes direction slowly in their favor. They continue to have operating losses and net losses and losses/share, but their cash position has accelerated and strengthened.
- While they had concentrated on GenSys and GenCore Products as well ( backup for critical infrastructure ), and while they will continue to support and service those products, they are focused (as you know!) on PEM GenDrives and are focused on the off-road high-capacity market.
- In 1999, they came public as a Joint venture of Edison Development Corp and Mechanical Tech, Inc., and in 2007, Plug Power acquired Cellex Power Products and General hydrogen Corp. - This gave them the market leverage of offering a complete suite of products.
- A Loan Facility Agreement ($15M) with SVB ended and has been repaid in full. They intend to re-establish that Credit Facility in 1st Q 2014 (catalyst as well!).
The answer to your question in terms of understanding the potential PLUG has in relation to the recent acceleration of orders and contracts is straight - forward once these major US companies establish a commitment to the long - term high capacity application of fuel cell technology. It's historically called the GILLETTE MODEL. In this case, GenKey.
What you've just written is redundant as it is either stated or implied or built into what information I've referenced and it's what's clearly stated in the Update in January by Plug Power. What i"m pointing out is a CONTINUUM OF CONSISTENT AND ACCELERATING REVENUE based on Plug's fundamental playing field presently. The market's interested in accelerating demand, eventual profitability, continuing growth through clear guidance that is met or surpassed, strengthening margins, capital and credit equilibrium and leverage ahead, debt and available credit management, domestic and global market expansion through partnerships, and this being a story of SCALE and eventual economies of scale and then natural consolidation.
This is a major growth story. Bracket backlog orders (represents accelerating demand, not an inability to meet that demand) with new agreements presently, combined with with the model of recurring revenue through GenKey agreements (representing predictability and a strong revenue base the established commercial contracts provide going forward into new agreements), and then understand Plug Power's positioning presently in a major hydrogen fuel cell build out in both commercial high capacity applications (forklifts and EVs, among other potential applications as listed on Plug Power's website ), and potentially as part of a major build out in military energy infrastructure cost savings strategies (back up power on sites to lessen or eliminate potential vulnerability relating to the U.S. military's reliance on the commercial electricity grid historically), among other applications for the military as well (UAVs). What we are experiencing is a confluence of major events related to energy management and when combining exponential domestic natural gas resources with an historical shift away from hyper - reliance on coal electricity generation, then combined with the movement of electricity generation through alternative emerging sources (wind and solar) that can travel away from its generation source to be STORED AS HYDROGEN, it's clear that fuel cell technology in this structural generational energy source and application shift is, again, a MAJOR GROWTH STORY. PLUG is positioned.
A few highlights from the slide show from the January 2014 Business Update -
- Orders booked to meet 2014 revenue targets by end of Q1.
THIS MEANS RAISED GUIDANCE FOR 2014 IN MY VIEW.
- Operational cash use less than $10M for 2014, yet they have $46M in the bank as of mid-January 2014. They've just raised $30M through a limited privately placed secondary.
WHAT THIS MEANS IS THAT THEY HAVE A STRONG CASH POSITION TO MEET OPERATIONAL DEMANDS, WHICH ARE ACCELERATING, WHICH WHEN COMBINED WITH AN ACCELERATION TOWARD PROFITABILITY, AND A DIRECT REFERENCE TO PARTNERSHIP IN ASIA, MEANS NO IMMINENT THREAT OF FURTHER DILUTION. THIS CLARITY AND A LIMITED INSTITUTIONAL PRIVATE PLACEMENT OF SHARES RAISED CAPITAL, REINFORCED $3 AS A STRUCTURAL SUPPORT LEVEL, SHOWED INSTITUTIONAL CONFIDENCE IN THIS FUNDAMENTAL STORY.
- Again, Plug Power set a conservative full year guidance for 2014 with a goal of achieving 70M USD in revenue. The Walmart agreement (This announcement representing a new 6 site agreement in play) alone represents a revenue range of $48-72M as Plug Power referenced the value of each GenKey site representing $8-12M, With accelerating orders possible with other existing commercial clients, including the real possibility of the imminent announcement of a partnership in Asia by one of the two CCs (March 13th CC for Year-end results and April 9th Q1 CC), IT'S REASONABLE TO BELIEVE THAT NOT ONLY WILL PLUG POWER MEET 2014 GUIDANCE, THERE'S THE LIKELIHOOD OF SURPASSING IT AND BEYOND THAT, THERE'S A REAL POSSIBILITY THAT FUTURE GUIDANCE WILL AGAIN ACCELERATE. WHAT THAT MEANS IS A HIGHER VALUATION ASSIGNED TO PLUG AND A HIGHER CAPITALIZATION, AGAIN STRENGTHENING THEIR CAPITAL POSITION AND IT MEANS A HIGHER PPS.
- They are the #1 PEM fuel cell integrator in the world and "To investors - the GenKey model represents a recurring and increasing revenue stream and a predictable business model. WHAT THIS MEANS TO ME IS A SUSTAINED GROWTH STORY.
Sentiment: Strong Buy
Ace Hardware recently announced it will deploy a fleet of 65 lift trucks with Plug Power GenDrive® fuel cell systems at its newest Retail Support Center, currently under construction in Wilmer, Texas. The GenDrive® systems will utilize Ballard fuel cell stacks as the primary power source.
Ballard provides both FCvelocity™-9SSL liquid-cooled stacks as well as FCgen™-1020ACS air-cooled stacks for integration into various Plug Power GenDrive® systems. Plug Power has revolutionized the material handling industry with cost-effective power solutions that increase productivity, lower operating costs and reduce carbon footprints. Plug Power’s GenDrive® fuel cell is a superior alternative to lead-acid batteries for electric lift trucks in the $20 billion global material handling market.
Compared to batteries, GenDrive® fuel cell systems in Class 1, Class 2 and Class 3 forklift trucks can provide extended run time without frequent and lengthy battery replacement and recharging cycles. For high-throughput, multi-shift warehouse or manufacturing operations, fuel cell forklift trucks can provide a lower life cycle cost and total cost of ownership, compared with traditional lead-acid battery solutions.
Dave Fortze, Ace Hardware’s Director of Distribution Support and Engineering was quoted as saying, “The implementation of a hydrogen fuel cell based application for our material handling equipment advances our strategy to provide the highest level of support to our customers and the communities that we serve, and that includes distribution centers that are focused on sustainability.”
With more than 4,600 hardware stores locally owned and operated across the globe, Ace Hardware is the largest hardware cooperative in the industry. Headquartered in Oak Brook, Illinois, Ace Hardware currently operates 14 distribution centers in the United States. The Wilmer Retail Support Center is scheduled for completion in early 2014.