Shares of Plug Power Inc (NASDAQ:PLUG) have surged over 73% in the pre-market today after the company reached an agreement with Amazon.com, Inc. (NASDAQ:AMZN)
for the e-commerce giant to use Plug Power fuel cells and hydrogen technology in its fulfillment network. At certain fulfillment centers, Amazon.com, Inc. (NASDAQ:AMZN) will begin powering its industrial equipment such as forklifts using Plug’s GenKey technology which will enable reduced costs, and faster charging times.
Plug expects revenue associated with the commercial agreements to come in around $70 million in 2017. CEO Andy Marsh 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’.
As part of the deal, Plug Power Inc (NASDAQ:PLUG) has given Amazon warrants to buy up to 55,286,696 common shares at an exercise price of $1.1893 per share. 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. The exact details of the warrants and vesting are expounded more in depth in a Form 8-K filed with the SEC.
What Does The Smart Money Sentiment Say?
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The smart money as a whole was slightly more bullish on Plug in the fourth quarter than in the third quarter. According to our data of around 742 elite funds, 4 were long Plug Power Inc (NASDAQ:PLUG) at the end of December, up 2 funds from the previous quarter. Sander Gerber‘s Hudson Bay Capital Management and Israel Englander‘s Millennium Management were some of the new fund holders, intiating new stakes of 10.2 million and 491,832 shares in the fourth quarter.
The Bottom Line
Plug Power Inc (NASDAQ:PLUG) shares have popped due to the company having made a significant deal with Amazon.com over the use of its fuel cell technology. For more reading, check out ‘8 Countries That Produce The Most Biofuels In the World‘.