Plug Power Has Soared This Year. How Walmart, Amazon Also Benefited From the Green-Energy Rally.

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One of this year’s stock market standouts has been

Plug Power,

a pioneer of clean-energy power supplies for forklifts and other traditional gas guzzlers. Its stock (ticker: PLUG) has soared sixfold in 2020, touching $25 a share this past week as the company announced a nearly $1 billion follow-on stock offering.

The enthusiasm for Plug is part of investors’ welcome willingness to put money on green-energy physics for global warming, including electric vehicles, hydrogen power, and the fuel cells made by Plug. Its fuel cells are plug-compatible with existing forklifts, making them easier to adopt for

Walmart

(WMT) and

Amazon.com

(AMZN)—the customers that accounted for two-thirds of Plug’s sales in 2018 and half in 2019. Some of Plug’s appeal to investors has surely owed to the sight of those two big names enjoying the benefits of Plug Power’s green products.

Amazon and Walmart reaped another green benefit from patronizing Plug. They got paid to buy its products. In 2017, the fuel cell maker offered them warrants for its stock, in exchange for every $50 million of purchases. The appreciation of Plug Power’s stock has made it possible for these happy customers to earn profits that exceed—by far—what they spend on Plug Power’s wares.

The footnotes to Plug Power securities filings duly disclose these sales incentives. We asked Amazon and Plug to discuss them, but they declined. Amazon referred us to Plug, and Plug cited the quiet period around its stock offering.

Amazon has been a better customer than Walmart. Plug’s filing for the September 2020 quarter show that the e-commerce giant is into its third $50 million tranche of orders. The exercise price for the 14.55 million shares Amazon earned from the first two tranches was $1.19.

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At a cost of $17 million, and the purchase of $100 million of Plug goods and services, Amazon could now be holding Plug stock worth more than $350 million. For the third tranche of orders, the warrant price got reset to about $13 a share. With the stock trading today above $24, the loyalty program’s incentive remains strong.

“It’s actually a real positive,” said Plug CEO Andrew Marsh, when asked about the warrant deals on the company’s Nov. 9 earnings call. Surely it is—for Amazon, which found a fast way to benefit from the green-energy revolution.

Write to Bill Alpert at william.alpert@barrons.com