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By Jeffrey Dastin
April 5 (Reuters) - Hydrogen fuel cell maker Plug Power Inc PLUG.O said Amazon.com Inc AMZN.O had acquired the right to buy up to 23 percent of the company and that it would supply batteries to power forklifts used by the online retailer in its warehouses.
Plug Power's shares were up 82.31 percent at $2.12 in heavy afternoon trading. Amazon's shares rose as much as 1.9 percent to hit a record high of $923.72.
Latham, New York-based Plug Power was valued at $319 million as of Tuesday's market close. Amazon must spend at least $600 million over the life of its contract with Plug Power for its warrants to fully vest.
Amazon, the world's largest online retailer will equip forklifts at 11 warehouses this year with hydrogen fuel cells so they can lift more goods before running out of juice, as well as charge faster, Plug Power's Chief Executive Andy Marsh said in an interview. Amazon will spend $70 million on the deal in 2017 and likely twice that next year, he said.
"Fulfillment centers are traditionally fairly low tech," said Marsh, explaining that labor as well as physical space could be freed up by moving away from batteries requiring lots of attention.
Amazon's deal with Plug Power could rekindle interest in makers of fuel cell companies, including Ballard Power Systems Inc BLDP.TO and Hydrogenics Corp HYG.TO , whose shares were up about 6 percent.
Fuel cell makers had become Wall Street darlings in 2014 as their technology was expected to be widely adopted in electric vehicles and forklifts.
However, the sector has lost favor with investors as the technology failed to gain traction.
Plug Power itself has lost more than two-thirds of its market value since the first quarter of 2014, when it was valued at more than $1 billion.
Raymond James analyst Pavel Molchanov described the deal as one of the occasional bright spots that highlighted the potential for growth in the fuel cell industry.
Plug Power's narrow focus of powering forklifts with fuel cells, essentially makes the company the only player in the market, Molchanov said.
While only a tiny fraction of forklifts globally are powered by hydrogen fuel, Wal-Mart Stores Inc (NYSE:WMT) WMT.N already uses the company's technology in its warehouses and is a top customer, Plug Power's Marsh said.
The retailer is locked in a fight with Amazon for share of U.S. shoppers' wallets.
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