Plug Power Shares Exploded After This Huge Amazon News

Plug Power Inc. had some very exciting news this week. The company has allowed Inc. to buy up to 23% of the hydrogen fuel cell maker.

Plug Power would supply the world’s largest online retailer with batteries to power forklifts used by the online retailer in select warehouses. Amazon will have to spend at minimum $600 million over the life of its contract with Plug Power for its warrants to fully vest.

Plug Power’s Chief Executive Andy Marsh said in an interview that Amazon will equip forklifts at 11 warehouses this year with hydrogen fuel cells so they can lift more goods before running out of juice, as well as charge faster.

“Fulfillment centers are traditionally fairly low tech,” said Marsh.

According to Marsh, Amazon will spend $70 million on the deal in 2017 and likely twice that next year.

Marsh commented on the deal and said, “This agreement is a tremendous opportunity for Plug Power to further innovate and grow while helping to support the work Amazon does to pick, pack and ship customer orders. Our hydrogen fuel cell technology, comprehensive service network, and commitment to providing cost-savings for customers has enabled Plug Power to become a trusted partner to many in the industry and we are excited to begin working with Amazon.”

The company’s release stated, “Plug Power has granted Amazon warrants to acquire up to 55,286,696 of Plug Power’s common shares at $1.1893 per share (Exercise Price), which is based on the volume weighted average closing price of Plug Power common shares for the thirty trading days ending April 4, 2017. Vesting of the warrants is tied to payments totaling $600 million in the aggregate made by Amazon, directly or indirectly, in connection with the purchase of goods and services from Plug Power. An adjustment to the Exercise Price will occur after the first 34,917,912 warrants have vested, and will be based on the volume weighted average closing price, at the time that such warrants vest.”

Amazon and Plug Power will also start working together to expand applications for Plug Power’s line of ProGen fuel cell engines.

Investors loved the news as shares of Plug soared 82.31% in afternoon trading. Amazon’s own shares saw a lift and even hit a record high.

Other fuel cell companies saw gains on the news including Ballard Power Systems Inc. and Hydrogenics Corp.

As of Tuesday’s market close, shares of Plug Power were valued at $319 million.

Disclaimer: We have no position in Plug Power Inc. (NASDAQ: PLUG) nor, Inc. (NASDAQ: AMZN) and have not been compensated for this article.

Sofia Vida

Sofia has been writing for major news outlets for over 15 years. In her spare time she enjoys hiking, walking her dogs, and going to concerts.

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