Extending their 6% slide down yesterday, shares of fuel cell specialist Plug Power (PLUG -0.93%) are continuing to plunge today. Investors seem to be concerned with the company's news regarding a recent acquisition.
As of 11:28 a.m. ET, shares of Plug Power have fallen 3.5%
Plug Power announced after the market closed yesterday that it had completed the acquisition of Frames Group -- a deal that had been announced in early November. According to Plug Power, Frames Group "designs, builds, and delivers processing equipment, separation technologies, flow control and safeguarding systems, for water and renewable energy solutions."
In neither the announcement addressing the closing of the transaction nor the related Securities and Exchange Commission filing did Plug Power provide financial deals of the transaction. This, perhaps, is the source of investors' consternation as they may be concerned that management is eschewing the company's financial health to secure deals that will help it achieve its 2028 goal: daily green hydrogen production of 1,000 tons.
Despite the lack of clarity regarding the purchase price, Plug Power lauded the value proposition of the deal, stating, "Revenue opportunities from the acquisition include an order backlog valued at approximately 100 million [euros] and a sizable project pipeline that will generate revenues through 2023 with major on-shore and off-shore energy providers seeking to transition to renewable energies and green hydrogen."
Investors' concern here seems well warranted. Management has, oftentimes, failed to be transparent with shareholders, and the lack of clarity here just seems to be the latest demonstration. Fortunately for renewable energy investors, there are plenty of options to choose from beyond this well-known hydrogen stock.