Plug Power Stock Drops Nearly 6% On Snag With GE
Shares of Plug Power Inc. fell nearly 6% Friday after two analysts downgraded the stock. The stock-price decline came a day after the designer of consumer fuel cells said design changes relieved its joint-venture partner, General Electric Co., of a contractual obligation to purchase 485 fuel cells, the bulk of its projected product sales this year.</br></br>That drop followed a nearly 27% decline on Thursday, when Plug Power made the disclosure in its first-quarter earnings report. Shares fell $3.4375, or 5.8%, at $56 at 4 p.m. Friday on the Nasdaq Stock Market. Plug Power shares have lost nearly twothirds of their value since hitting a 52-week high of $156.50 on Jan. 24.</br></br>On Thursday, Plug Power, Latham, N.Y., said fuel-cell units it was designing and which GE planned to market for the company didn't conform to specifications agreed upon in a February 1999 contract, which relieved GE of the obligation to buy them. The company, which didn't disclose the precise specifications for competitive reasons, originally had expected to deliver the fuel cells, which are small, appliancetype units designed as power sources for homes, by year end.</br></br>The delay is significant because fuelcell technology, while viewed as promising, still is evolving. GE was contracted to pay $10.3 million for the units through the companies' joint venture, GE MicroGen, at a projected loss to Plug Power, then resell them to residential customers for initial field trials.</br></br>Officials at both companies said GE, Fairfield, Conn., still expects to purchase most, if not all, of the 485 units from Plug Power, albeit some not until 2001, and said other aspects of their relationship remain intact. GE owns a 12% stake in Plug Power, and the head of GE Power Systems, Robert L. Nardelli, sits on Plug Power's board.