FuelCell Energy's stock tumbles after plans for another reverse stock split

By Tomi Kilgore

Fuel-cell technology company sets special meeting for shareholders to vote on the split, as stock has been below $1 for 4 months

Shares of FuelCell Energy Inc. tumbled Tuesday after the fuel-cell technology company said it will hold a special meeting of shareholders to ask them to vote on a proposal that will allow for another reverse stock split.

Shareholders of record on Sept. 10 will be able to vote at the special meeting, which will be held on Oct. 31.

The stock (FCEL) sank 12.3% in morning trading, and was trading less than 3% above the record-low close of 44.1 cents on Aug. 12.

While the company did not disclose a reason it wants to enact a reverse stock split, the stock hasn't closed above the Nasdaq's $1 minimum-bid listing threshold since April 15.

On June 4, the company disclosed that it had been notified by the Nasdaq that it was not in compliance with the $1 minimum-bid requirement. With that notification, the company has 180 days to regain compliance.

The company has enacted two reverse splits in the past, a 1-for-12 reverse split in May 2019 and a 1-for-12 reverse split in December 2015.

Those splits combined 12 shares of common stock into one, which effectively multiplies the stock price by 12.

FuelCell did not disclose on Tuesday any plans for the number of shares it expects to combine into one in its current proposal.

The company, which went public in 1992, said in its latest audited quarterly filing that it has never been profitable or sustained positive cash flow from operations.

In the latest quarter, FuelCell reported a net loss that widened by 11% to $37.7 million. Its unrestricted cash and cash equivalents as of April 30 totaled $158.8 million, down from $250 million on Oct. 31, 2023.

The stock has plunged 71.8% year to date, while the S&P 500 SPX has advanced 17.4%.

-Tomi Kilgore

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08-20-24 1026ET

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