The countdown to Nel ASA’s half-year report on July 15 has turned into a high-stakes referendum on the Norwegian electrolyser maker’s ability to convert geopolitical tailwinds into hard orders. While a blockade of the Strait of Hormuz has rattled global energy markets and revived interest in green hydrogen, the company’s stock continues to trade at distressed levels, weighed down by persistent short selling and a string of operational setbacks.
Shares in Nel ASA inched up to €0.21 on Monday, a modest bounce that does little to mask a 40% decline over the past month. The 50-day moving average at €0.27 remains far out of reach, and the relative strength index has dropped to near 33, brushing the oversold threshold. Short sellers have held their ground: Citadel Advisors and Tages Capital together hold 1.1% of outstanding shares short, representing about €4 million in bets against the company. That figure only captures positions above the 0.5% reporting threshold, leaving smaller speculative trades invisible. With annualised volatility of 85%, the stock remains a magnet for hedge funds.
The geopolitical crisis unfolding in the Persian Gulf has given hydrogen bulls fresh ammunition. The Hormuz blockade has disrupted roughly 20% of global LNG shipments, while attacks on Qatari facilities have knocked out 17% of that country’s export capacity. European policymakers are now scrambling to redesign the continent’s energy architecture, a shift that analysts say should accelerate large-scale electrolyser projects. In theory, Nel stands to benefit as a supplier of modular alkaline electrolysers. In practice, the company must first prove it can translate policy momentum into a stabilised order book.
That task has been made harder by deteriorating fundamentals. In the first quarter, customer revenue slipped 5% to 148 million Norwegian kroner. The operating loss narrowed slightly but still stood at minus 100 million kroner, underscoring the gap between ambition and profitability. A cash pile of 1.4 billion kroner provides a cushion, buying management time to execute its turnaround, but it also raises the pressure on the coming earnings report to show tangible progress.
Should investors sell immediately? Or is it worth buying Nel ASA?
Nel has been overhauling its business model to move from bespoke project engineering to industrial-scale manufacturing. In May, it launched commercial sales of a new pressurised alkaline platform built on a modular architecture. For a 25-megawatt plant, the company now targets costs below $1,450 per kilowatt — a sharp reduction from the custom-built systems that have long dominated the sector. The strategy is designed to capture the mass market for green hydrogen, but the July 15 report will be the first real test of whether that value proposition is gaining traction.
Leadership uncertainty adds another layer of risk. CEO Håkon Volldal announced his resignation in mid-June, though he will remain in post for six months while the board searches for a successor. On the legal front, the company recently settled a long-running dispute with US-based Iwatani Corporation over refuelling stations, an agreement that also covers the recently spun-off Cavendish Hydrogen subsidiary. That removes a distraction but does little to solve the underlying revenue problem.
With the company now in a mandatory quiet period — management has paused investor meetings until the half-year results — all eyes are on the numbers due in two weeks. If the quarterly update shows a weak order intake, the stock could test its 52-week low of €0.17. If the figures surprise to the upside, the heavy short interest could trigger a sharp squeeze as bears scramble to cover. For Nel, the verdict on July 15 will determine whether the Hormuz crisis becomes a genuine catalyst or just another false dawn.
Ad
Nel ASA Stock: Buy or Sell?! New Nel ASA Analysis from June 29 delivers the answer:
The latest Nel ASA figures speak for themselves: Urgent action needed for Nel ASA investors. Is it worth buying or should you sell? Find out what to do now in the current free analysis from June 29.
Nel ASA: Buy or sell? Read more here...
