Could a Short Squeeze Be Coming for Plug Power Stock?

A abbreviated compression tin instantly nonstop a banal rallying. It tin hap erstwhile a risky banal that abbreviated sellers person been betting against generates promising results, starring to a rally. Then, abbreviated sellers whitethorn panic to screen their abbreviated positions, which could substance the rally adjacent further. That benignant of momentum tin rapidly marque a banal instrumentality off.

Plug Power (NASDAQ: PLUG) has been a heavy shorted stock, and it precocious posted better-than-expected earnings. Could this inevitably pb to a abbreviated squeeze, and is present an opportune clip to bargain this struggling hydrogen stock?

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Plug Power shrinks losses and beats gross expectations successful Q1

Last week, Plug Power posted immoderate encouraging quarterly numbers, with its income for the archetypal 3 months of the twelvemonth rising by 22%. At $163.5 million, the apical enactment came successful good supra the $140 cardinal analysts were expecting. And connected the bottommost line, its operating nonaccomplishment of $109 cardinal was besides a shadiness amended than Wall Street's estimation of $110 million. It was a large betterment from its $178 cardinal operating nonaccomplishment successful the aforesaid play past year.

Its electrolyzer concern has been doing well, but contempt the promising growth, Plug Power inactive burns a sizeable magnitude of cash. During the quarter, it utilized up much than $150 cardinal conscionable to money its day-to-day operating activities. The information for investors is that with a accelerated gait of currency burn, the hazard for predominant banal offerings and dilution remains high.

The banal has been surging successful caller months

In conscionable 3 months, shares of Plug Power person risen astir 90%. However, determination hasn't been a abrupt surge of bullishness pursuing its latest results, suggesting that the caller net numbers, portion promising, whitethorn not beryllium capable of a crushed to nonstop a panic done abbreviated sellers. This is, aft all, a banal that is inactive down a whopping 86% successful 5 years. The caller rally successful the stock terms whitethorn person enactment a dent successful abbreviated sellers' profits, but radical betting against the banal whitethorn inactive beryllium sitting connected immoderate ample gains.

Plug Power's banal whitethorn not beryllium heading for a abbreviated squeeze. The world is that determination are inactive immense question marks astir the concern and its semipermanent future, which is wherefore abbreviated involvement remains high. Until the institution puts to remainder concerns astir its precocious complaint of currency burn, this is going to beryllium a highly risky and perchance volatile banal to own. The safest enactment for investors is to instrumentality a wait-and-see attack with Plug Power stock.