Plug power (Plug) – Get Report It will invest $ 1.5 billion in the hydrogen fuel cell manufacturer following Thursday’s stock increase in South Korean conglomerate SK Group.
Plug Power shares received a quiet 20% setback in premarket trading as the companies announced they were forming a joint venture in South Korea to provide hydrogen fuel-cell systems, fuel stations and electrolysers.
As part of the deal, SK Group will receive 51.4 million shares of Plug Power at $ 29.29. Plug Power shares closed down 7.5% higher on Wednesday at $ 35 and were up another 20% on Thursday at $ 42 in premarket trading.
The deal comes as governments and companies globally want to move away from relying on traditional fossil fuels for electricity in other forms of renewable energy, including solar, wind and hydrogen.
Hydrogen is produced from natural gas and can be generated from water through electrolysis driven by renewable energy. When lit, it produces no greenhouse gases.
Located in Latham, New York, Plug Power is a veteran in the hydrogen fuel cell market. The company makes stationary fuel cells to run mobile for data centers as well as delivery vans. It also produces a fuel cell that uses forklifts and other cargo-handling gear by the likes of Amazon (AMZN) – Report, Carrefour, BMW, Souther (Hence) – Get reports, and Walmart (WMT) – Get Report.
The company’s GenDrive system integrates plug power and fuel cells manufactured by Ballard Power Systems (BLDP) – Get the report. The system includes a hydrogen storage system that allows rapid “recharge” for several hours for lead-acid batteries.
Plug Power’s stock has risen in recent months as investors have sought ways to wager on the emergence of the hydrogen economy. Although it had been making fuel cells for over a decade, last year it expanded into hydrogen production and distribution.
In November Plug Power posted better-than-expected revenue in the third quarter of $ 107 million, up 80% from $ 59.5 million a year earlier.