Plug Power's Stock Sales Agreement Raises Concerns

Plug Power Inc. announced on Wednesday that it has entered into an agreement with B. Riley Securities to sell up to $1 billion in common stock. This news comes as the alternative-energy company's shares continue to plummet.

With a focus on hydrogen fuel-cell technology, Plug Power has experienced a significant decline in share value over the past year, losing over 80% of its value within a 12-month period. In Wednesday's extended trading session, the stock dropped by an additional 16%.

The company's financial situation has worsened, as it reported "unprecedented" supply-chain challenges and delayed production timelines in its last earnings report. To make matters worse, Plug Power issued a going-concern warning in November.

To address its financial needs, Plug Power stated in a previous shareholder letter that it would require additional capital. This was in light of its existing cash and liquidity position, as well as the demands of its business plan. The company expressed its interest in exploring various debt capital and project financing options.

Recently, Susquehanna downgraded the stock, citing delays in building out Plug Power's green hydrogen production facility and securing external funding sources for its growth plans. The analyst noted that the Treasury guidance on production tax credits was also less favorable than expected, which could potentially impact the locations of future production facilities.

Despite acknowledging Plug Power's end-to-end solutions for the hydrogen ecosystem, Susquehanna adopted a cautious stance until more clarity emerges regarding financing and gross-margin improvement.