What happened
Renewable energy stocks are once again making headlines Wednesday, as shares of hydrogen fuel cell star Plug Power (PLUG -1.25%) came crashing down 7.1% in 1:45 p.m. EST trading, followed in quick succession by electric-car charging company Blink Charging (BLNK -0.86%) down 9%, and solar-module maker JinkoSolar (JKS -0.34%) down 8.7%.
And for a change, there appears to be some news behind renewable energy stocks' big moves today.
Image source: Getty Images.
So what
In the case of Plug, we seem to be seeing investors giving back gains accrued yesterday. That's not too surprising. After all, The Wall Street Journal just published a big expose that was largely negative in tone on the future of the fuel cell industry. Although Plug rival Bloom Energy -- not Plug -- was the focus of that particular article, and Bloom is suffering the worst of the damage today, Bloom's takedown appears to be having a ripple effect across the fuel cell industry and is pulling down Plug in its wake.
At Blink, investors were just reminded of Citron Research's recent negative report on the company, when Blink's CEO went on CNBC to dispute the short-seller's assertions and dismiss its criticisms that Blink spends no money on research and development (R&D) and has "no real revenues." That may have been a tactical error on the CEO's part, however, reminding investors to check those numbers -- which, as it turns out, confirm that Blink has spent zero dollars and zero cents on R&D work for five straight years and has recorded just $4.5 million in revenue over the past 12 months.
Now what
Now let's look at JinkoSolar, which actually has the most substantive news to report today -- and not the good kind of news, either.
Very early this morning (4:12 a.m. EST, in fact), JinkoSolar announced that it intends to issue and sell $100 million worth of new American Depositary Shares, pricing them at whatever price the market is willing to pay. Unfortunately for Jinko shareholders, that price is now nearly 10% lower than what it was before Jinko made its announcement -- about $56 and change. At this price, Jinko is going to have to issue about 1.8 million ADS and dilute its shareholders out of nearly 4% of their ownership interest in the company in the process.
Jinko didn't say exactly what it needs the money for, but it's not hard to guess. The company hasn't generated any positive free cash flow from its business since 2012 and racked up cash losses (cash burn) of $2.6 billion from 2013 to 2019, according to a tally prepared by S&P Global Market Intelligence. The company's latest SEC filing didn't contain a statement of cash flow, so it's hard to know for certain that this cash-burning situation continues into the present year. But given that reported cash levels declined sequentially between Q2 and Q3, my guess is that Jinko's cash-fire is still burning pretty hot.
With the stock up nearly three times in price over the past year, now seems like a good time to raise some cash and feed that fire -- but you can't expect current shareholders to be happy about it.
