Plug Power (PLUG) stock took a nosedive of more than 40% on Friday following disappointing third-quarter earnings and revenue results, as the company revealed its need to raise capital to support its operations.
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The Latham, N.Y.-based clean energy company has redirected its efforts toward the green hydrogen supply chain, specializing in manufacturing fuel cells, electrolyzers, and providing storage and transportation solutions.
In its third-quarter report, the company revealed a loss of 47 cents per share along with revenue of $198.7 million, falling short of analysts’ expectations of a loss of 30 cents per share and sales of $199.4 million. The company attributed its financial performance to unprecedented supply challenges in the North American hydrogen network.
Plug Power cautioned that its current operations would require additional capital and is exploring various debt capital and project financing solutions. The company’s cash flow decreased by $411 million in Q3, leaving them with around $567 million of unrestricted cash or available-for-sale securities on its balance sheet.
On Friday, PLUG stock plummeted by 42.8% to 3.40 in above-average trading volume, following a decline of 1.5% on Thursday to 5.93.
Morgan Stanley’s Andrew Percoco stated that the firm believes PLUG will need to raise at least $500 million by the end of the year to support its current cash-burn rate.
Furthermore, Plug Power is evaluating debt financing solutions and seeking a commitment from the Department of Energy Loan Program Office to finance green hydrogen plants. It is also exploring equity partners to lower capital expenditures on hydrogen plants.
“If hydrogen supply does not improve, we believe it could continue to put pressure on PLUG’s ability to deliver new material handling and other fuel cell application sites,” Percoco wrote.
Plug Power Stock
Founded in 2002, Plug Power initially focused on supplying hydrogen fuel cells primarily for forklifts in large warehouses but has since shifted its focus to becoming the largest green hydrogen generator. They are aiming to produce over half of its hydrogen energy from entirely renewable sources by 2024. The company is also expanding into heavy-duty vehicles, stationary fuel cells, and aims to serve ports in the U.S. and Europe.
Having reached a high of 75.49 in January 2021, PLUG stock has drastically declined, witnessing a 90% drop and a 52% decline in 2023.
On July 13, Plug Power stock surged 7.5% after announcing a deal for 100 megawatts of electrolyzers for a green hydrogen project in Europe. Electrolyzers utilize electricity to split water molecules, generating green hydrogen from water.
Plug Power stated that the green hydrogen would replace “gray” hydrogen produced from natural gas or methane in the oil refining process.
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