Regardless of the many good news and developments around hydrogen, there must of course also be a critical consideration of the aspects that may, for example, hinder or delay rapid build-up of production capacity. In addition to adverse influences due in part to misunderstood or counterproductive regulatory measures (EU/Germany) are aspects such as the shortage of skilled workers, supply chain problems and financing.
FuelCell Energy should actually have generated a quarterly turnover of over 30 million USD in the second quarter, ending April 30th (fiscal year), but it was by then only about 16 million USD with a stated loss in the amount of about 31 million USD, or minus 0.08 USD per share. The management board nevertheless believes that they are on track to achieve a turnover of 300 million USD by 2025, and 1 billion USD by 2030. The order backlog was almost unchanged at about 1.3 billion USD. In the bank lies a formidable 490 million USD, for which a multitude of share placements (64 million new shares) is responsible – in proportion to the stock exchange value of 1.4 billion USD, a healthy basis, even if the question arises as to how these share placements were justified.
Finally: FuelCell Energy has agreed and settled with South Korean company Posco. FuelCell is now independent from Posco again and can pursue other opportunities in Asia. The company figures of FuelCell Energy are not yet very convincing, given the last quarterly results: a measly 14 million USD turnover. Although there are pending orders of 1.29 billion USD in the books, so far seemingly few new orders are coming in. The cooperation with ExxonMobil was extended once again, but with no new conditions to report.
With ExxonMobil, FuelCell Energy is already working nicely with regard to carbon capture. Now ExxonMobil has published a six-year plan that sees the corporation wanting to invest USD 15 billion in this area. As a result, I therefore believe that for FuelCell Energy there is potential for many a supplementary and major order.
FuelCell Energy [Nasdaq: FCEL] has finally closed the chapter on its partnership with Posco. It seemed like a story with no winner.
FuelCell Energy recently announced that, since launching business, it had produced over 10 million megawatts of clean electricity, saving over 1.5 million tons of carbon dioxide. Its basis for success is the SureSource platform. The company is now gradually fulfilling orders worth more than USD 1.3 billion. New bookings season the pot, as they are expected to lead to high margins.
How quickly things can change. Just a few months ago, FuelCell Energy [Nasdaq: FCEL] risked bankruptcy due to questionable financial practices. With the help of a highly committed and successful consulting firm, the business then righted the ship. At one point, its price soared from around USD 0.13 to an intraday high of over USD 4.00 as it saw its market cap jump from USD 40 million to USD 500 million. The latest stock crash then put an end to it all and the stock took a nosedive, finishing below USD 1.00. It will certainly take some time before the price averages out to reflect business growth.
What a farce it was that shortsellers took advantage of toxic financing (i.e. preference shares convertible into ordinary shares) to depress FuelCell Energy’s share price and at the same time get more and more of the company’s shares onto the market – at least, this is what I think happened not too long ago. In addition, some project financing was subject to conditions that could be considered questionable (e.g. minimum return, guarantees). In addition, bank loans were used as leverage against the company, as reference was made to safety margins and termination clauses, while FuelCell did not approach restricted cash. A vicious circle.
FuelCell had to feel what it means to fall for smart investors (loan sharks?). The preference shares that could be converted into ordinary shares were probably used to push down the price via short selling and to receive more and more shares due to a conversion ratio. Did the analysts who evaluate and recommend FuelCell Energy simply overlook this? Now the capital has been merged. The number of artificially inflated shares via conversion of preference shares has now been significantly reduced. Unfortunately, all this seems to leave the management cold, otherwise they would at least make a press release.
More and more news reports, talk shows and interviews with leading politicians in Germany are making explicit mention of fuel cells – sadly, most of the time only in reference to the diesel scandal among the country’s automakers. Still, it’s a clear sign that people are becoming aware of the technology’s potential. Pierre-Etienne Franc, secretary general of the Hydrogen Council, has said recently: “The years 2020 to 2030 will be for hydrogen what the 1990s were for solar and wind. It’s a real strategic shift.”