Bloom Energy – Share price fireworks after collapse

Energy supply with Bloom SOFC systems on ships
Energy supply with Bloom SOFC systems on ships, © Bloom

The figures for the third quarter were satisfactory: On balance, earnings per share were $ 0.01, with the quarterly loss being due to stock-based compensation (issuance of shares and options to employees), which is “extraordinary” accounting and non-operating.

More importantly, incoming orders rose by more than 45 percent. The forest fires in California and the associated shut-down of power lines by the major energy suppliers have indirectly benefited Bloom considerably, as 26 of the 89 FC micro grids are located in this US state and not a single one has failed. According to CEO and company founder K. R. Sridhar, Bloom has since been inundated with enquiries from companies and municipalities because they want to become network-independent. Bloom adds that in other US regions there is a similar problem with meteorological phenomena, but not with fires, but with heavy snowfall. So, you could say: Crisis as a productive state, even if unfortunately, this may sound rather sarcastic and cynical.

The world needs such off-grid FC power plants. Bloom will feel positive influences (orders) from this trend, as well as the expansion of activities to countries such as India promises further potential. After the IPO at US$ 15 and the high at over US$ 35, current quotations below US$ 10 appear very low.

Bloom has a healthy financial position – around US$ 358 million (including US$ 23.8 PPA) – and a debt of US$ 664 million. According to the company, approximately US$ 261 million of this amount is non-recourse, i.e. it is attributable to other companies or partners. Of this, US$ 330 million will have to be refinanced by December 2020, whereby this is to take place in the first half of 2020 – the investment bank Jefferies has already been commissioned. Bloom wants to do without dilution of the existing shareholder base as far as possible. I’m betting on a convertible bond issue. In any case, as things stand at present, Bloom will be able to solve this well with increasing orders on hand and good profit margins.

read more in H2-international February 2020

Risk warning

Every investor must always be aware of his own risk assessment when investing in shares and also consider a sensible risk diversification. The FC companies and shares mentioned here are small and mid-caps, i.e. they are not standard stocks and their volatility is also much higher. This report is not a buy recommendation – without commitment. All information is based on publicly available sources and, as far as assessment is concerned, represents exclusively the personal opinion of the author, who focuses on a medium- and long-term valuation and not on a short-term profit. The author may be in possession of the shares presented here.

Author: Sven Jösting, written beginning of December 2019

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