Monday, March 10, 2014

A Note On Plug Power

Shares of Plug Power have seemed to defy logic....yet again. After rallying 30% on Friday thanks to CEO Marsh's interview on CNBC, shares are up another 30% on even stronger volume to start off the earnings week. I thought there would be a correction at $6.00, instead the stock jumped nearly 100%!

I advise every single investor in Plug Power to assess their holdings, clearly definite their timeframe with the stock, and act accordingly. Make no doubt, all things must come down....but how far down is the question? With the recent intraday rise to $11.50, investors are going to think $10 is cheap and buy there, and if not $10 then $9, and if not $9 then surely $8. I do not see Plug Power losing 50%+ solely on a conference call that has already given the numbers for Q4 bookings. The real meat of Plug Power may nott be in the company's earnings report this coming week, but rather in Q2 earnings and any quarter thereafter. With the Wal-Mart units beginning shipping in Q2, that is when Plug is prepping for its busiest quarter ever. I expect profit taking, who doesn't? But I think a lot of people are beginning to understand the true potential of this stock, and the hype doesn't hurt as well.

Look at it this way, Plug Power rose to a valuation as high as $8 billion solely on hype and a grossly mis managed unprofitable business back in 2000. Currently it is valued at around $1 billion, about to reach profitability, is in hyper-growth stage, and has a plethora of positive developments just waiting to be announced.

A $2 billion valuation of Plug Power would put shares above $20
A $4 billion valuation of Plug Power would put shares above $40
A $6 billion valuation of Plug Power would put shares above $50
A $8 billion valuation of Plug Power would put shares above $80

Why stop there? Plug Power is targeting a massive market that is worth tens of billions of dollars (MORE THAN 100 $Billion is you include GenKey)

A $20 billion valuation of Plug Power would put shares above $200.

Do you see where i'm going with this? The potential is massive, granted extremely long-term.

Plug Power has built the product, sold the customers, and is creating a sticky ecosystem to ensure continuous purchase of gendrives and GenKey service agreements. It's only a matter of time now.