What happened
Without any of the usual suspects in play -- analyst downgrades, company announcements, etc. -- there seem to be separate factors pushing shares of Plug Power (PLUG -3.11%) lower today. Besides news of a peer raising capital through the issuance of equity, the signing of the Inflation Reduction Act may be signaling to investors that it's time to sell shares of the hydrogen and fuel-cell specialist.
As of 10:42 a.m. ET, shares of Plug Power are down 4.1%, paring back their early loss of 5.4%.
So what
Announcing that it intends to issue 13 million shares of its stock to raise capital, Bloom Energy (BE -3.22%) disappointed investors yesterday with the prospect of shareholder dilution. This certainly appeared on the radar of Plug Power's shareholders.
BE Revenue (Annual) data by YCharts.
Distinguishing itself from Plug Power, Bloom Energy appears closer to profitability and generating positive cash flow than its fuel cell peer -- and yet it's still engaging in equity raising. Consequently, Plug Power investors likely fear that Bloom Energy's recent announcement may portend a similar announcement and, with it, their own brush with shareholder dilution.
The other issue affecting Plug Power's stock today is the conclusion of the Inflation Reduction Act saga, which ended with President Biden signing the legislation into law yesterday. The legislation had stagnated for some time but gained new life when Sen. Joe Manchin, Democrat senator from West Virginia, announced his support of the bill. This encouraged investors to buy Plug Power's stock. The fact that the drama surrounding the bill is now over is likely a variation of the old investor axiom, "Buy the rumor, sell the news."
Now what
News of Bloom Energy's equity raise may be disconcerting for Plug Power investors, but it has $2.6 billion in cash and cash equivalents on its balance sheet as of the end of the second quarter of 2022. It's unlikely, therefore, that Plug Power will be looking to raise capital in the near future. And while the signing of the climate bill is pushing the stock lower, it's certainly not cause for Plug Power bulls to jump ship.
