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Plug Power Inc (NASDAQ:PLUG) Explodes On Expanded WalMart Collaboration

NASDAQ:PLUG

Plug Power Inc (NASDAQ:PLUG)

Plug Power Inc (NASDAQ:PLUG) jumped 15.09% in Friday’s trading session after announcing a new collaborative agreement with WalMart Stores Inc (NYSE:WMT). The retail giant had initially inked an agreement for the company’s fuel cell powered forklifts. The new agreement paves way for the fuel-cell technology specialist to access financing at a lower cost of capital.

Plug Power-WalMart Agreement

Plug Power Inc (NASDAQ:PLUG) bill itself as an alternative energy technology provider with focus on fuel cell technology. The company has unveiled a suite of ProGen fuel cell engine platforms for providing clean scalable power for on-and-off road applications. Its lead products are GenDrive, hydrogen fueled PEM fuel system for powering material handling vehicles and GenFuel, a hydrogen fueling delivery system.

Under the terms of the agreement, Plug Power Inc (NASDAQ:PLUG) is to provide its GenKey hydrogen fuel station and fuel cells over the next three years, in 30 additional WalMart outlets. Ten sites are already under contract and scheduled for completion before the end of the year. Prior to the signing of the new agreement, Plug Power had its products in 22 WalMart sites.

The nation’s largest retailer is also to purchase up to 55.3 million common shares. The retailer is to purchase the first 5.8 million batch after completion of the transaction. The total value of the shares that WalMart is buying is $600 million. The retailer will pay for the shares in $50 million installments.

“Our expanding relationship with WalMart validates Plug Power’s advanced capabilities in fuel cell products and systems, allowing the world’s largest retailer to maintain its leading position as an industry innovator,” said, Andy Marsh, Plug Power Inc (NASDAQ:PLUG) CEO.

Strengthening Revenue Base

Marsh expects the expanded collaboration with Walmart to help improve the company’s revenue base in addition to the cost structure. The company stands to generate up to $80 million this year from the agreement.

The new agreement marks yet another milestone on WalMart increased focus on fuel cell technology. Plug Power Inc (NASDAQ:PLUG) supplies the retailer with fuel cells hydrogen fuelling stations in addition to providing maintenance services. The nation’s largest retailer currently operates the largest fleet of hydrogen powered electric vehicles in the world totaling more than 6,600.

Jeff Smith, WalMart Senior Director of Logistics, expects Plug Power Inc (NASDAQ:PLUG)’s fuel cell solutions to help bolster the company’s supply chain on being a cost-effective alternative to traditional energy solutions.

I have no positions in any of the stocks mentioned, and have no plans to initiate any positions within the next 72 hours. All information, including any data, is provided without any guarantees of accuracy.

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About the author: James Marion is a University of Houston student studying Business with a concentration in Finance. James has interned with several investment professionals and hopes to pursue a career as a professional stock analyst after graduation.

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James Marion is a University of Houston student studying Business with a concentration in Finance. James has interned with several investment professionals and hopes to pursue a career as a professional stock analyst after graduation.

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