Investing in stubborn people - the amazing story of Bloom Energy
The story of K.R. Sridhar and his company Bloom Energy is an important lesson for anyone investing in the stock market,
sometimes what looks like a phenomenal overnight success is the result of 25 years of blood, sweat, and tears.
Everyone is talking about Bloom Energy now:
True, Bloom Energy's stock surged by 1100% in the last year, but the path there was fraught with obstacles.
It all started with a dream of settling on Mars -
Sridhar (the owner of $BE) worked as a rocket scientist at NASA, where he developed life support systems for a future colony on Mars.
But one night, the big dream of settling on Mars exploded, and the mission was canceled in 2001.
Sridhar decided to take the technology he developed and reverse its application.
He took the technology and built fuel cells that could provide electricity to buildings on Earth with minimal environmental pollution.
For the next five years, he worked on this development 'under the radar' without anyone knowing.
What are fuel cells?
To understand the technology, think of a 'power plant in a box' installed right next to the building,
It uses a chemical process to generate clean electricity, so it is not dependent on the central power grid, and it is also much greener than conventional electricity generation.
Consider the potential, for example, in ships, which could get a small, non-nuclear power plant!
Although the technology seemed promising, the path was very difficult:
Initially, his genius was celebrated, but it was quickly discovered that there was simply no market demand for the product.
The company burned a lot of cash; investors were angry, and the stock plunged by about 98% from its IPO price in 2018.
Sridhar faced ridicule and distrust because his vision seemed too far removed from economic reality.
Then the artificial intelligence revolution arrived and changed everything; giant companies building data centers needed reliable and immediately available electricity!
The company's fuel cells, which run on natural gas, became the best market solution for the energy problem.
The product nobody wanted became overnight the only thing that could prevent AI data centers from going dark.
The numbers today speak for themselves:
- The company's order backlog stands at nearly $20 billion.
- Brookfield is backing infrastructure with $5 billion for AI projects.
- Tech giant Oracle ($ORCL) signed a contract with the company for a massive amount of electricity supply.
- The company shows 130% revenue growth year-over-year and is becoming profitable.
A report released two days ago by Morgan Stanley already sees Bloom Energy entering state-level power infrastructure stabilization, entering the hydrogen market, and the ship propulsion market.
The dream of the stubborn Sridhar is coming true!
Perhaps the biggest lesson from this story is simply to look for companies managed by people who don't give up?
Ultimately,
Stubbornness and belief in the product are what bring the greatest results.