Shares of Plug Power got a cool 20% jolt in premarket trading after the companies announced they were forming a joint venture to provide hydrogen fuel-cell systems, fueling stations and electrolyzers in South Korea and elsewhere.
As part of the deal, SK Group will receive 51.4 million shares of Plug Power at $29.29 each. Plug Power shares closed 7.5% higher Wednesday at $35 and were up another 20% at $42 in premarket trading on Thursday.
The deal comes as governments and companies globally seek to shift from relying on traditional fossil fuels for power to other forms of renewable energy including solar, wind and hydrogen.
Hydrogen is produced from natural gas and can be generated from water through electrolysis powered by renewable energy. When burned, it produces no greenhouse gases.
Based in Latham, New York, Plug Power is a veteran in the hydrogen fuel-cell market. The company makes stationary fuel cells to run data centers as well as mobile ones for delivery vans. It also makes fuel cells that run forklifts and other freight-handling gear used by the likes of Amazon (AMZN) – Get Report, Carrefour, BMW, Souther (SO) – Get Report, and Walmart (WMT) – Get Report.
The company’s GenDrive system integrates fuel cells manufactured by both Plug Power and Ballard Power Systems (BLDP) – Get Report. The system incorporates a hydrogen storage system that allows for rapid “recharge” as opposed to several hours for lead-acid batteries.
Plug Power’s stock has soared in recent months as investors have sought ways to bet on the emergence of a hydrogen economy. Although it had been making fuel cells for more than a decade, last year it expanded into hydrogen production and distribution.
Plug Power in November posted better-than-expected third-quarter revenue of $107 million, up 80% from $59.5 million a year earlier.