Why Plug Power Stock Dropped Today
Shares of Plug Power (NASDAQ: PLUG) stock tumbled 3% through 3:15 p.m. ET Thursday after the fuel cell maker announced that it has acquired cryogenic equipment manufacturer Joule Processing in a deal valued at $160 million.
As Plug noted in its announcement, it actually acquired Joule last month with the intention of using the "proven cryogenic process technology that Joule developed for the gas processing industry [for] hydrogen liquefaction." With this acquisition, Plug aims to lower the cost of producing liquefied hydrogen by 25%. Plug paid $30 million up front for Joule and plans to pay the remaining $130 million of the purchase price over time in the form of "future earn outs."
Plug noted that it expects to get all that money back and more through "capital expenditure savings of approximately $200 million." Judging from investors' reaction to the news today, however, it seems they're not convinced about that part.
Source Fool.com
