Bloom Energy Corporation (BE) stock rallied in the intraday session today after the announcement of partnership expansion with SK ecoplant. BE stock price saw a push of 30.76% to reach $26.40 a share at the time of this writing. The stock was gloomy in the previous trade and went down by 4.76% at closing with a $20.19 per share price. Let’s deep dive to explore more about this stock.
What’s Happening?
Bloom Energy and SK ecoplant, an affiliate of South Korean conglomerate SK Group, announced the expansion of their existing partnership in order to fortify market leadership in power generation as well as to establish market leadership in the hydrogen economy. The partnership represents a minimum of 500 megawatts (MW) purchasing from BE stock representing a revenue commitment of $4.5 billion. Both companies will create two hydrogen innovation centers through the combined effort and target an equity investment of nearly $500 million.
The strategic partnership between these two companies started three years ago and until now, both have transacted almost 200 MW of projects. The equipment and expected service revenue were $1.8 billion for this tenure. Both BE stock and SK ecoplant expect an additional 500 MW of power between 2022 and 2025, in connection with partnership expansion. The equipment and services revenue is expected to be $4.5 billion in the future.
BE stock and SK ecoplant to establish Two Hydrogen Innovation Centers:
BE stock along with SK ecoplant intend to establish Hydrogen Innovation Centers in the United States and Korea. The main purpose is to speed up the global market expansion for BE stock’s hydrogen fuel cell and hydrogen electrolyzer products. Both companies are committed to a zero-carbon future and practicing environmental, social, and governance practices.
SK ecoplant to invest $500 million in BE stock:
SK ecoplant will acquire 10 million shares of BE stock by investing $255 million in Bloom Energy. The purchase price will be $25.50 per share. SK ecoplant can acquire 11 million additional shares of BE common stock at a 15 percent premium prevailing per share price which must be before November 30, 2023. BE stock wants to use the net proceeds for the commercialization of hydrogen solutions, market growth, and general corporate purposes.
Wrap Up:
BE stock is getting hype after the recent announcement of partnership expansion with SK ecoplant. The stock is performing well for last month as it gained almost 32% in the last thirty days. However, it lost almost 3% year to date.
