Bloom Energy’s rough week


Good afternoon,

Bloom Energy had another rough stock market week as its share price dropped 11 percent.

The fuel cell maker, which operates a Newark plant, was the subject of a new Wall Street Journal (subscription) story. Investment analysts also lowered stock price targets.

The latest story took an even-handed look at the company, highlighting its struggles and deals that included the sale of a of Bloom fuel cell arrays in New Castle County that feed electricity into the Delmarva Power grid.

How that piece of business and others came to be treated as revenue has long raised eyebrows. The business reporter forAxios examined similarissues last year.

Bloom’s presence in Delaware dates from the state’s painfully slow recovery from the recession of 2009.

The Delaware General Assembly approved a long-term deal that feeds fuel cell electricity into the grid. In return, Bloom built a plant at the University of Delaware Star Campus in Newark.

The deal has been increasingly controversial as the gap widened between the cost of electricity generated from Bloom fuel cells and increasingly abundant wind, solar, and natural gas supplies. Lawsuits in Delaware that attempted to void the Bloom-Delmarva deal have gone nowhere.

Bloom employment in Newark remains well below the anticipated level of 900, although higher-than-expected payrolls at the Newark plant have partially offset the job gap.

On Thursday, Bloom shares dropped below $25 a share after trading above $30 earlier in the week.

It could have been much worse.

Last year,Hindenberg Researchproduced a scathing report on Bloom that predicted its demise.

Bloom shares, already under pressure, fell below $3.50.

Still, short-sellers who followed Hindenburg’s advice have lost a bundle.

Despite the pandemic, Bloom shares rose during 2020 as investors shrugged off the Hindenberg report and looked for alternative energy plays that mainly include the “bubble-like” market for electric vehicle stocks.

As the Journal story noted, the company has made headway in reducing the cost of electricity produced by its fuel cells.

Promising opportunities are surfacing in South Korea, a nation that is doubling down on hydrogen power.Microgrids that use Bloom fuel cells and provide emergency power key facilities represent a growing market.

Bloom has rejiggered its fuel cell technology to produce “green” hydrogen that can, in turn, power its fuel cells.

It is also working with a Korean shipbuilder on power ships with Bloom fuel cells. If successful, the technology would reduce a major source of pollution.

In nearly a decade of covering Bloom, one thing is clear. Despite a lack of profitability, accusations of questionable accounting practices, and nonstop predictions of its demise, the company soldiers on and continues to perplex its critics:-Doug Rainey, chief content officer.

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