Plug Power's $200 million stock offering is the latest chapter in liquidity saga

By Bill Peters

Plug Power's stock tumbles as offering prices at a 13% discount

Shares of Plug Power Inc. tumbled in early Friday trading after the alternative-energy company said it launched a $200 million stock offering, following broader declines this year amid questions about the state of its finances.

In a filing late Thursday, Plug Power (PLUG) - which is trying to build out hydrogen-energy infrastructure that includes production and storage - said it had cash and cash equivalents of approximately $62.4 million, and restricted cash of approximately $956.5 million as of June 30.

Early Friday, the company said the share offering priced at $2.54, which represents a 13% discount to Thursday's closing price of $2.92. The value of the stock offering was 9.2% of Plug Power's market capitalization of $2.17 billion at Thursday's close.

Shares of Plug Power sank 16.4% in premarket trading, which puts it on track for their worst day since they plunged 40.5% on Nov. 10, 2023.

The stock has tumbled 35.1% year to date through Thursday, while the S&P 500 index SPX has gained 16.2%.

Plug Power said it plans to use proceeds from the stock sale for "general corporate purposes."

It also said it would give the offering's underwriters a 30-day option to buy up to $30 million in extra shares. Morgan Stanley is acting as the offering's book-running manager.

The company, in its most recent annual report in February, said it believed it had enough money to resolve earlier doubts about its ability to keep operating. Still, it has suffered losses for years, and has cut jobs and costs.

The company, as Barron's has noted, faces a hydrogen market that has yet to fully take off, and has also struggled to make a sufficient amount of hydrogen on its own. Chief Executive Andy Marsh told Barron's that the company is losing money on each ton of hydrogen it has had to buy elsewhere amid the shortfall.

Still, in May, Plug Power shares surged, after it said it landed a $1.66 billion conditional commitment for a Department of Energy loan guarantee. The company said it planned to use that long-awaited financial assistance to finance up to six green hydrogen-production sites around the U.S.

"The loan guarantee will prove instrumental to grow and scale not only Plug's green hydrogen plant network, but the clean hydrogen industry in the United States," Marsh said at the time.

Tomi Kilgore contributed.

-Bill Peters

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07-19-24 0913ET

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