Leading hydrogen fuel cell developer Plug Power (NASDAQ: PLUG) needed some juice on Thursday, as investors aggressively traded out of the company. They were largely reacting to news of a federal review of grants and other forms of support doled out to a range of energy companies, including Plug Power.
At the end of the day, Plug Power closed almost 11% lower in price. That was on a session when the benchmark S&P 500 (SNPINDEX: ^GSPC) managed to tick up by 0.4%.
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The Department of Energy (DoE) announced that morning that it would be conducting a review of more than $15 billion in financial assistance spread among 179 grants to energy projects. The grants were awarded for a variety of purposes, such as the development of next-generation batteries (Plug Power’s specialty).
Image source: Getty Images.
The DoE said it would be reviewing such projects on a case-by-case basis to, in its words, “identity waste of taxpayer dollars, protect America’s national security, and advance President Trump’s commitment to unleash affordable, reliable and secure energy for the American people.”
The government agency added that it has already requested additional information from entities that have received the grants. It said that it is prioritizing large-scale commercial projects.
Trump has been a frequently sharp critic of next-generation, “green” energy solutions, and openly supported classic inputs like oil and even coal. He has also claimed that the outgoing Biden administration rushed through many grants in the days before it left office.
Plug Power is an obvious target in this effort, as it received billions of dollars in loan guarantees for its work with batteries. While it remains to be seen how this new initiative from the DoE plays out, it puts Plug Power and its green energy peers on a defensive footing, and drains resources from their core competencies. Investors should keep a sharp eye on how this situation develops.
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Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
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