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Plug Energy (NASDAQ:PLUG) closed -11.5% in posting its lowest degree since September 2019 in Thursday’s buying and selling after disclosing plans to promote as a lot as $1B in shares, which one analyst stated will not be sufficient to maintain operations going previous this yr.
Shares fell as little as $2.26 for a seventh consecutive day of losses, bringing the inventory’s YTD losses to 46% after plunging 64% final yr.
Whereas buyers absolutely anticipated the corporate would want to lean on sources for financing, the quantity anticipated possible was not as excessive as $1B.
Two months in the past, Plug Energy (PLUG) issued a going concern warning, citing liquidity points and provide challenges within the liquid hydrogen market in North America.
The corporate had slightly greater than $100M of money and money equivalents on the finish of Q3, down from $690M on the finish of 2022.
Sustaining its Underweight score, Piper Sandler’s Kashy Harrison stated pursuing a dilutive fairness elevate at present costs suggests different sources of capital had proved difficult, and acquiring a Division of Vitality mortgage possible will probably be tough in an election yr.
So is $1B sufficient to fund operations for the following 12 months? “Unlikely,” Harrison wrote, “until administration is prepared to make the tough choices, dramatically scale back the scale of the group, streamline operations and solid away aspirations of constructing a inexperienced hydrogen empire,” including subsequent Tuesday’s enterprise replace name will present some perception.
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