FuelCell Energy Inc (NASDAQ:FCEL) Preferred Stock Pricing Rattles Investors

FuelCell Energy Inc (NASDAQ:FCEL)

FuelCell Energy Inc (NASDAQ:FCEL) slumped 3.75% after announcing the pricing of a $33.5 million convertible preferred stock transaction. Investors sent the stock lower even after the company announced a new 20 megawatt fuel cell project in South Korea.

FuelCell Stock Performance

The sell-off is already arousing concerns as to whether it will mark the end of a bullish run that began in May. FuelCell Energy Inc (NASDAQ:FCEL) is currently trading in a $1.45 – $1.63 trading range with a 52-week low of $0.80 a share.

FuelCell Energy Inc. (NASDAQ:FCEL) has struggled to rise above the $1.55 mark which acts as a key resistance level. The stock closing above the $1.63 could fuel a run to the $2.00 a share mark, which appears to be another resistance level.

FuelCell Energy Inc (NASDAQ:FCEL)
One month stock price chart for FCEL.

However, investor’s sentiments on the stock is waning after the pricing of the new stock offering. A point of concern is that the offering could plummet the company into more debt.

FuelCell Energy Inc (NASDAQ:FCEL) plans to offer 33,500 shares of convertible stock with a stated face value of $1,000 a share. The shares carry a 0.0% dividend and can be converted into common shares at $1.84 per common share. Each preferred share is being sold at $895.52 for gross proceeds of $30.0 million.

The company plans to use net proceeds from the offering for working capital purposes as well as financing of a number projects already underway. The offering should close on or about September 8, 2017.

20 Megawatt Fuel Cell Project

Part of the funds from the proposed offering are to be used to finance 20-megawatt fuel cell project that FuelCell Energy Inc (NASDAQ:FCEL) is working on, in conjunction with Korea Southern Power Company. Works on the project should begin before the end of the year with the facility poised to be fully operational next year.

The SureSource 3000 power plant is to produce clean electricity and thermal energy for use in district heating systems. Hanyang Industrial Development Company is to provide the engineering procurement and construction services for the project.

“This is the first fuel cell project for KOSPO and we are pleased that the value proposition of our SureSource solutions meets the exacting needs of KOSPO, one of Korea’s largest utilities. Our multi megawatt, scalable easy-to-site clean energy solutions are well-suited for utility-scale applications such as this project,” said FuelCell Energy Inc (NASDAQ:FCEL) CEO, Chip Bottone.

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: Steve Clark is a 23-year Wall St professional with stints in M&A, risk management, and algorithm trading. Steve keeps his head in the game by looking for, and writing about, small companies that often get overlooked by the big investment firms

Will Deal Reverse Fortunes for FuelCell Energy Inc (NASDAQ:FCEL)?

FuelCell Energy Inc (NASDAQ:FCEL)

FuelCell Energy Inc (NASDAQ:FCEL) shares gained almost 7.5% on news of an award by PSEG Long Island for a 39.8 megawatts fuel cell project under the Fuel Cell Resources Feed-in Tariff. The Long Island Power Authority (LIPA) will, under the PSEG program, purchase power from the fuel cell projects under 20-year power purchase agreements. FuelCell Energy Inc (NASDAQ:FCEL) will install, operate and maintain the fuel cell power plants.

NASDAQ:FCEL
Six Month Daily Candle Bar Graph for $FCEL

FuelCell Energy Inc (NASDAQ:FCEL), headquartered in Danbury, CN, aims to develop clean, efficient, and affordable fuel cell solutions. FuelCell provides comprehensive turn-key solutions for their customers and includes everything from the design and installation of a project to the long-term operation and maintenance of the fuel cell system.

The local municipality of Brookhaven will benefit from incremental revenue as three vacant commercial parcels of land are converted to revenue producing sites. Next steps in project development include working with the utility on the interconnection agreements, power purchase agreements, and finalizing site engineering. The SureSource 4000 is the largest power plant in FuelCell Energy Inc (NASDAQ:FCEL)’s product portfolio, generating 3.7 megawatts of clean power with leading electrical efficiency of approximately 60 percent. This enhanced-efficiency fuel cell system is designed for applications focused on clean and affordable power driven by the economics of high system electrical efficiency rather than thermal efficiency.

FCEL shares have done well for the past month, generating gains of over 22% but for the year are down over 70%. FCEL shares have been heavily diluted since 2012 when 13.79 million shares were outstanding. Each year the number of outstanding shares increased and by 2016 the number stood at 29.77 million. In the meantime, sales have been decreasing. In 2013 the company posted $187.7 million in sales but only $108.3 million in 2016.

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.

Don’t miss out! Stay informed on $FCEL and receive breaking news on other hot stocks by signing up for our free newsletter!

About the author: Steve Clark is a 23-year Wall St professional with stints in M&A, risk management, and algorithm trading. Steve keeps his head in the game by looking for, and writing about, small companies that often get overlooked by the big investment firms.

FuelCell Energy Inc (NASDAQ:FCEL) Reports Grid Resiliency Assignment With PSEG Long Island

FuelCell Energy Inc (NASDAQ:FCEL)

FuelCell Energy Inc (NASDAQ:FCEL) reported the finalization of a power purchase agreement with PSEG Long Island to offer a current electrical substation with power produced by a SureSource 1500™ fuel cell facility. The fuel cell facility will be based at an industrial base on Long Island that will use the high grade heat for production process, minimizing both emissions and operating costs.

The update

Chip Bottone, the CEO and President of FuelCell Energy Inc (NASDAQ:FCEL) reported that they are delighted to offer this affordable and clean energy offering to advance Long Island’s electric grid with foreseeable power that evades harmful emissions, functions quietly, and utilizes minimal land. Fuel cells come in the list of the land-efficient clean power technologies and this deal will help demonstrate numerous advantages of integrating fuel cells into energy mix.

Using this fuel cell power facility will reduce emissions by as much as 3,300 tons of CO₂ yearly, which is comparable to the emissions from 650 vehicles. It will also minimize smog resulting NOx emissions by 5 tons annually, and the SOx emissions, which leads to acid rain, by as much as one ton annually and avoid particulate emissions, helping public health.

This assignment supports the acceptance of clean on-island power production to improve grid resiliency and reliability. Fuel cells utilize chemistry to turn a fuel source into heat and electricity in an extremely efficient process that releases virtually no chemicals as the resource is not burned. In fact, the combination of modest land-use needs, the quiet operating nature of immobile fuel cell power facilities, and near-zero pollutants supports installation in urban sites where the power is utilized.

FuelCell Energy Inc (NASDAQ:FCEL) reported that customers gain with reduced operating costs delivered in a manner that boosts sustainability goals and improves power reliability. With capacity factors and high availability, fuel cell power facilities make meaningful offerings to Renewable Portfolio Standard marks.

In the last trading session, FCEL gained more than 5% to close at $1.45. Roth Capital reaffirmed their ‘Neutral’ rating on FuelCell Energy Inc (NASDAQ:FCEL) shares in a research note released to investors this week. Roth Capital has a target of $1.50 price on FCEL, down from their previous target of $2. However, Zacks Investment Research has upgraded the stock to ‘Hold’ rating from its earlier rating of ‘Sell’. FBR & Co lowered their price target to $2.50 from $3.00 and set a rating of market perform in its latest research report.

3/20/2017
Ticker Symbol FCEL
Last Price a/o 3:21 PM EST  $1.45
Average Volume 607.72K
Market Cap (mlns)  $ 58.30M
Shares Outstanding (mlns) 40.21M
Share Float (mlns) 37.90M
Inside Ownership
Short Float 11.19%
Short Interest Ratio 6.98
Quarterly Return -23.68%
YTD Return -17.14%
Year Return -78.16%

I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 96 hours. All information, or data, is provided with no guarantees of accuracy.

About the author: Monica Gray has an undergraduate degree in Accounting and an MBA – earned with Honors. She has six years of experience in the financial markets and has been a securities analyst for the past two years.