As all you investors are quite aware Plug Power Inc has been on quite a roll lately. In the past 2 weeks Plug shares have skyrocketed from an initial $4.37 a share to an intraday high of $11.30. In other words this astronomical price appreciation has led to gains of over 160-180%. But why exactly has Plug skyrocketed as of late? The answer to that is very simple. Speculation+momentum+locked up contracts with big firms such as Walmart+added speculation and momentum= Plug’s booming start in 2014. Unfortunately, for many investors who started buying into the hype building around Plug yesterday wasn’t such a good day. Plug’s run came to a screeching halt and dropped 41.51% and an added 5.64% in after hours. The main reason why Plug had a bad day was because of a negative 9 page report written by Andrew Left of Citron Research predicting that once the hype around Plug dies down it will trade around the 50 cent mark again. This negative report followed up by a famed short seller labeling Plug as nothing more than a “casino stock” led to a massive selloff. Plug is a company that has a history of over promising and not delivering which has left a bad taste in the mouth of many analysts and investors. It’s very simple Plug needs to start delivering, it’s time to walk the walk. While the new contracts Plug has locked up with major firms most notably Walmart are impressive the only way they can shut their critics up is by coming through in their earnings on March 13. This is Plug’s big chance to show everyone that they are finally moving in the right direction. If Plug can beat on eps and revenue and more importantly maintain or raise guidance it will prove once and for all that Plug is here to stay. An earnings beat would make yesterday’s blunder a footnote in their history and without a doubt would carry their stock to being priced around $15 a share. All in all it’s do or die time for Plug never has this company faced a more crucial earnings report than this one; a beat will only carry Plug higher, but a miss will more than likely push this stock back down to $2-$3 a share. For investors this is a high risk high reward scenario. Personally I believe that Plug has the stuff to pull this one off just because they and everyone else knows they can’t afford to mess up again as it would be absolutely catastrophic for their stockholders.
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