UNEMON1's  Instablog

UNEMON1
Send Message
"Risk comes from not knowing what you're doing" Warren Buffett I look and sift the world for such misplaced bets. When I occasionally find one, I first exploit it for profit. Then, I write about it for anyone else interested in such ideas. Twitter: @unemon1 Scribd:... More
  • Power Plug Inc. (PLUG) … Simply Put … It's Just A Colossal Bubble! Uni-Pixel (UNXL) Style!  0 comments
    Mar 10, 2014 9:31 AM | about stocks: PLUG, FCEL, BLDP, UNXL

    Power Plug Inc. (NASDAQ:PLUG) … simply put … it's just a Colossal bubble! Uni-pixel (NASDAQ:UNXL) Style!

    In the most optimistic Scenario for PLUG pumpers … A 50%++ Downside is in the Cards!

    I guess you all are familiar with the PLUG's story … so … let's just go directly to the point.

    "Based on actual information supplied by ITA members, the US Factory Shipments Through 2012 and US Factory Shipments Through 2012-Bar Graph reveals shipments in the United States for electric rider trucks (Class 1 and Class 2 combined), motorized hand trucks (Class 3) and internal combustion powered trucks (Class 4 and Class 5 combined) since 1983." http://www.indtrk.org/market-intelligence

    Well … as you can see … PLUG isn't playing in a booming U.S. industry!! Please, remember that even PLUG defines its potential market at approx. $4b (

    Since 1990 total shipments are up only 50% (and down about 24% since the 2006 peak). The annual Growth rate has therefore been 1.84% p.a. over the past 24 years.

    The Electric Rider Segment growth has been slightly higher than the sector average, namely … 2.60% p.a. Total Shipments for 2012 were 49,126 Units. A 5% p.a. growth rate starting in 2013 … seems a generous enough assumption to me.

    PLUG's Gendrive, an eco-friendly product/technology … is likely to be a competitor to / substitute in … the Electric Riders Category (Classes 1&2).

    Assumptions:

    1. 2014 Classes 1&2 Units Shipped = 54,161
    2. 2014 Gendrive Units Shipped = 3,250
    3. Gendrive Price = $20,000
    4. Gendrive sales increase exponentially till 2017 … when Gendrive achieves a 20
    5. % Market Share. Then, the Market Share remains Constant.
    6. Service Revenue = 10% of Annual Gendrive Revenue
    7. Net Income (= FCF) Margin = 15%
    8. Discount Rate = 12%

    Btw … remember … here I am valuing PLUG … assuming a "Best Case" Scenario. What would happen if … problems were to emerge? eh eh eh !

    The model is very basic ... and it actually does favor PLUG bulls. According to analysts' estimates, on a 2014FY estimated $63.7m Revenue base … PLUG is expected to book a $9.9m loss

    Now you can see why I am building a Short Position in PLUG!

    Started Shorting in the $6.70s … shorted in the $8.20s …&… If this crazy market brings it to $12 … I will short even more … down the road!

    To me PLUG … just looks like … UNXL … 12 MONTHS AGO! … What do you think?

    To learn more about the technology behind Gendrive … I suggest you to have a look at this Seeking Alpha Article:

    http://seekingalpha.com/article/2075013-pulling-the-plug-on-the-fuel-cell-mania

    BTW: The only bullish analyst out there … is from Cowen and Company:

    Would you like to guess the name of the Bookrunner of the latest financing?

    Yup … that's Cowen.

    *ITA's manufacturing Members represent more than 90% of the forklift market in North America.

    PS: Current Market Valuation would theoretically only be "reasonable* (but not attractive) … only if the company were to be able to become a major player in the Transportation Refrigeration Units, Ground Support Equipment and Range Extenders industries (currently mentioned as Market Expansion Opportunities for GenDrive Architecture) .

    Disclosure: I am short PLUG.

    Additional disclosure: and hopefully, this insane Market ... will give me the chance to short more shared at higher prices!

    Stocks: PLUG, FCEL, BLDP, UNXL
Back To UNEMON1's Instablog HomePage »

Instablogs are blogs which are instantly set up and networked within the Seeking Alpha community. Instablog posts are not selected, edited or screened by Seeking Alpha editors, in contrast to contributors' articles.

Comments (0)
Track new comments
Be the first to comment
Full index of posts »
Latest Followers

StockTalks

  • $PHMD: A True Turnaround Story? Regaining Access To The Japan Market? http://seekingalpha.com/p/2aouk
    Mar 26, 2015
  • $DK Real question GeoInvesting should ask is: "why had DELEK Hungary liquidated 32.359m DK shares over the past 2.5 years?"
    Mar 5, 2015
  • $ATHX up to 205m USD in milestone payments + 2digit royailty for just the JP market on 1 indication. $ATHX currently at 200m mcap.
    Mar 2, 2015
More »
Instablogs are Seeking Alpha's free blogging platform customized for finance, with instant set up and exposure to millions of readers interested in the financial markets. Publish your own instablog in minutes.