FuelCell Energy – Potential to catch up

Average Capacity Factor © FuelCell

FuelCell Energy [Nasdaq: FCEL] has finally closed the chapter on its partnership with Posco. It seemed like a story with no winner.

While FuelCell Energy said that Posco did too little with the fuel cell technology it licensed from the manufacturer, Posco stated that it lost around USD 800 million because of the companies’ joint venture. It is now up to the arbitration court to work out a settlement.

In my view, FuelCell Energy’s carbon capture technology developed in-house will draw in other clients besides ExxonMobil. The company must have also launched an at-the-market program by now in order to raise over USD 75 million. The aim is to become less dependent on Orion Energy Partners’ USD 200 million corporate loan facility. At the same time, FuelCell announced the placement of more than 17 million shares, the result of warrants that Orion received for around USD 0.26 a share as part of a refinance deal. But while they may bring Orion a nice profit, the deal does nothing for FuelCell.

Still, I am inclined to believe these kinds of financial transactions will not have a significant or lasting impact on trading.

read more in H2-international October 2020

Risk warning
Share trading can result in a total loss of your investment. Consider spreading the risk as a sensible precaution. The fuel cell companies mentioned in this article are small- and mid-cap businesses, which means their stocks may experience high volatility. The information in this article is based on publicly available sources, and the views and opinions expressed herein are those of the author only. They are not to be taken as a suggestion of what stocks to buy or sell and come without any explicit or implicit guarantee or warranty. The author focuses on mid-term and long-term prospects, not short-term gains, and may own shares in the company or the companies being analyzed.

Author: Sven Jösting

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