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via Market Watch

Shares of Plug Power Inc. rocketed on heavy volume Wednesday, after the fuel cell company announced a supply agreement with Amazon.com Inc., which could be worth up to $600 million and includes a potentially large equity investment.

As part of the agreement, Plug Power said Amazon will use its fuel cells and hydrogen technology in its fulfillment network. At certain locations, Amazon will start powering industrial equipment, such as forklifts, using Plug Power’s GenKey technology.

Although the agreement doesn’t include an upfront cash payment, aggregate payments for goods and services could reach $600 million. That compares with 2016 revenue of $85.9 million.

Plug Power has also granted Amazon warrants to buy up to 55.3 million common shares, at an exercise price of $1.1893 per share. Vesting of the warrants will be based on how much Amazon spends on Plug Power products and services. There were 180.6 million Plug Power shares outstanding as of Dec. 31.

The stock PLUG, +63.84%  shot up as much as 85% on heavy volume to a 17-month high of $2.40 in intraday trade, before paring some gains. Volume topped 58 million shares in the first hour after the open, enough to make the stock the most actively traded on the major U.S. exchanges, and about 10 times the full-day average.

“The proof is always in the execution, but you’re talking about Amazon,” said analyst Carter Driscoll at FBR Capital Markets & Co. “It is something to be excited about.”

He said the agreement could benefit Plug Power in other says, such as by helping coax existing customers to expand to multisite supply deals. There is also a technology collaboration aspect to the deal which could help Plug Power develop technology for use in other industries, including mobility. Read More