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A sell-off in the hydrogen fuel cell space has sent the shares of Ballard Power Systems Inc. into a tailspin, knocking almost 30-per-cent off the company’s market value in just three days.

An earnings miss from one of Ballard’s competitors, combined with news that Volkswagen AG plans to cut spending on fuel cell development, seemed to crush investor enthusiasm for the entire subsector.

“When one fuel cell name is down big, the rest of the group follows,” said Jeffrey Osborne, an analyst at Cowen.

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For Ballard, which, up until a few days ago was by far the best performing stock in the S&P/TSX Composite Index over the last 12 months, the swift reckoning put an end to a remarkable run.

The Vancouver-based company soared to the top of the Canadian stock market in recent months over heightened awareness of global climate change and an increased appetite for clean-tech stocks.

Ballard’s fortunes are largely pegged to the Chinese market, where renewable energy subsidies support the development of fuel cell technology for buses and trucks.

A tripling of Ballard’s shares over the last 12 months pushed the company’s valuation into the stratosphere, despite a persistent lack of profitability. Over just the first three weeks of the year, the stock rose by 75 per cent.

“This stock is strictly speculative,” said Ross Healy, chairman of Toronto-based research firm Strategic Analysis Corp. “There is not a penny of earnings in sight.”

One consistent source of business for Ballard comes from its partnership with Audi, which generates about US$25-milion in annual revenue – roughly 25 per cent of Ballard’s top line.

Last week, Herbert Diess, the CEO of Volkswagen, which owns Audi, said the company would divert resources away from hydrogen fuel cells, which he said won’t be competitive with battery-powered electric engines for at least another decade, according to Reuters.

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“That's not what many had hoped,” said Craig Irwin, an analyst at Roth Capital Partners. “We interpret this to mean maybe there's not so much opportunity now for things to get bigger.”

The second piece of bad news for Ballard came on Wednesday, when FuelCell Energy Inc. fell short of fourth-quarter earnings estimates and posted a 38-per-cent decline in revenue over the prior year.

The U.S. company’s stock fell by 39 per cent over the following two trading days, as Ballard’s stock seemed to plunge in sympathy.

Related: Canada’s great hope for a clean energy superstar two decades ago has returned as the TSX’s top gaining stock

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