Green energy company Plug Power Inc. (PLUG) continued its trend of violent up and downswings, as shares dropped significantly the day after an announcement of a deal with FedEx caused shares to soar.
Plug Power had been on a dramatic rise at the end of 2013, with a particularly sharp uptick in December. That first spike was caused by an announcement from CEO Andy Marsh, who assured investors that for the first time in 16 years Plug Power would finally turn a profit.
Plug Power develops and manufactures clean energy fuel cells. With the green energy market exploding, Plug Power had finally started to see a turnaround.
Following a return to profitability, Plug Power gained additional traction on Jan. 8 when the company announced a partnership with shipping behemoth FedEx (FDX) to supply them with clean energy fuel cells for a proposed fleet of electric delivery trucks.
The $3 million deal was financed by the Department of Energy, who have supplied hefty good-faith loans and subsidies to green energy companies as of late.
The resulting stock rise meant that in less than two weeks, the company had doubled in value.
The very next day the market corrected investors' exuberance. After all, the deal with FedEx, while nice, hardly justified an over $50 million one-day increase in valuation. On Jan. 9 the stock plunged amid heavy trading, shedding 21.20 percent in value to settle in at $3.59 a share.
As recently as one year ago, Plug Power, which at one time was worth over $1,500 a share, was on the brink of bankruptcy. While they have indeed returned to profitability, and the trend towards green energy seems to have no chance of waning anytime soon, the massive valuation increase of Plug Power was not sustainable, and could be due for further correction going forward.