The momentum behind cleantech stocks may be fading—again. For about a year, companies pushing to decarbonize and electrify the world captured the market’s imagination as never before. But now, as investors try to determine which companies can make it over the long run, they may want to consider the story of Plug Power Inc.
The hydrogen fuel cell maker, based in a suburb of Albany, N.Y., has already survived boom-bust cycles that devastated many other cleantech companies. Its shares reached almost $150 in early 2000, then flirted with penny-stock status for much of the next two decades. The company changed management and adjusted its business strategy. Then, as investors’ appetite for climate-friendly technologies returned, Plug Power became a Wall Street darling again, with a market value that topped those of utility giants such as PG&E Corp. and Consolidated Edison Inc. in early 2021.
Plug Power’s renaissance was emblematic of a broader revival in the cleantech sector. As the cost of batteries and wind and solar power declined, new technologies became economically competitive. Tesla Inc.’s stock surged more than 700% in 2020, making it one of the world’s most valuable companies. Funds tracked by BloombergNEF pumped more than $17 billion into climate-related startups last year, up from $1.4 billion a decade earlier.
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By 2010 the cleantech bubble had burst. Venture capitalists used to the quick turnaround of traditional tech investments became impatient. Nancy Pfund, founder and managing partner of DBL Partners and an early Tesla Inc. investor, describes such investors as drive-bys, saying there was a “tourist quality” to cleantech investing at the time.
“I hope it’s gone,” Pfund says. “It feels like the challenge is more evident and serious. The amount of people betting their careers on climate change is at an all-time high. In that sense, it’s very different than 10 to 15 years ago.”
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