Plug Power, Carbon Done Right Developments, Nel ASA - Exponential growth

Carbon Done Right Developments - Another milestone

One of the up-and-coming players in the generation of carbon credits is the Vancouver-based company Carbon Done Right Developments. The Greentech, which is managed by James Tansey, is also one of the few pure players listed on the market.

The business model sees the Canadians working with partners to invest in the exploration, restoration and management of land and marine systems that can either be protected or restored to fully productive ecosystems. Carbon Done Right Development has projects in Sierra Leone, Ghana, Suriname and Mexico.

The currently most significant reforestation project is in Sierra Leone. Here, the Company announced that all conditions have been met to receive the fourth disbursement under a pre-purchase agreement with a Fortune 500 company. The project has an initial acreage of 5,000 hectares that can produce up to 1.9 million tons of validated and verified Verra emission credits over a 30-year period. The area can also be expanded by a further 20,000 ha.

According to the Boston Consulting Group, trading in emissions certificates is set to increase more than eightfold by 2030. Due to the large number of projects, Carbon Done Right, which is valued at just CAD 5.20 million, is well positioned to participate in the exponential growth. The planned listing on the London AIM should provide a boost.

Plug Power - Class action filed

Plug Power was considered one of the great hopes of hydrogen fuel cell technology. However, the Company led by CEO Andy Marsh has been disappointing for years with missed sales and earnings forecasts. It is no coincidence that the share price has fallen by 97% since its high at the end of January 2021 of EUR 75.49 to a new low for the year of EUR 2.57. In addition to the fact that the fuel pioneer from Latham in New York could run out of money sooner or later, further negative news caused the share price to slide again.

Plug Power is facing a class action lawsuit for securities fraud. According to a report by GlobeNewswire, the Company's promises that it had made progress "on schedule" in expanding its green hydrogen production facilities and had secured various non-dilutive sources of financing are now under legal scrutiny.

The lawsuit accuses Plug Power of misleadingly concealing the negative effects of supply chain bottlenecks and material shortages. It also alleges significant delays in the expansion of hydrogen production facilities and in securing external funding to support its growth targets. The Company allegedly downplayed the true extent and scope of these problems and overestimated its short-term production capacity and expansion opportunities.

The situation only became clear to investors on November 9, 2023, when the quarterly figures for the third quarter were published. In view of Plug Power's future viability, investors should currently give the share a wide berth.

Nel ASA - Further sell-off after the figures

The Norwegian hydrogen specialist's share price performance was not much better than that of Plug Power. Since peaking at USD 4.20 at the beginning of January 2021, the share price has fallen by almost 90%. At USD 0.4315, the share price is only slightly higher than its low for the year of USD 0.412. In our view, a further break would result in a further sell-off.

After announcing the figures for the first quarter, it seemed Nel ASA could break away from its low for the year. This was because losses were significantly lower than in the same quarter of the previous year. However, this was due to a special effect, namely the contract adjustment with the truck manufacturer Nikola. Overall, an increase in turnover of 13.5% to EUR 33.2 million was recorded. In addition, the net loss fell from EUR 16.37 million to EUR 1.88 million.

The success of the alkaline hydrogen electrolysis division was a key factor in the return to profitability. Following an operating loss of EUR 0.94 million in the same period of the previous year, this division achieved an operating profit of EUR 9.04 million, almost completely compensating for the losses in other divisions.

Climate change will continue to accompany humanity. In addition to expanding renewable energies, the issuance of emission certificates is a valuable tool for climate protection. Carbon Done Right Developments has achieved another milestone in this area. Plug Power and Nel ASA are struggling on the charts and face further sell signals.