Plug Power Inc. Stock Drops Amid Increased Interest from Short Sellers

Shares of Plug Power Inc. experienced a nearly 5% drop on Tuesday, putting them on track for their lowest close in over three years. This decline is mainly attributed to a surge in interest from short sellers, who are investors that bet on the stock price falling.

Plug Power's stock (PLUG) has been consistently decreasing for three out of the past four trading days. If the current trend continues, it would mark the lowest closing price since June 23, 2020, when it closed at $6.43. Throughout this year, the stock has declined by almost 50%, in stark contrast to the S&P 500 index's 10% growth.

According to analysts at Cowen, there has been a notable increase in short-seller interest for Plug Power and other electric vehicle (EV) and alternative-energy stocks in recent weeks. In fact, short-seller interest in Plug Power rose by 2.2% between late August and mid-September, ranking among the top 10 largest increases. The only companies with higher increases were electric pickup-truck maker Nikola Corp. (NKLA) and electric delivery-van maker Workhorse Corp. (WKHS), with boosts of 4.8% and 3.7% respectively.

Plug Power specializes in producing hydrogen fuel-cell packs that power warehousing equipment like forklifts. They also offer other products such as backup fuel-cell stationary power and backup power units.

Recently, analysts at Truist Securities revised their price target for Plug shares from $9 to $8, representing a potential 24% increase in value compared to Tuesday's prices. However, they maintained their hold rating on the shares. The analysts' decision is primarily influenced by the timing of sales for certain components, which they expect to pick up in the fourth quarter. Nevertheless, they consider Plug Power to be a "show me" story, particularly due to the company retracting its 2023 guidance earlier this year.