This has been a volatile year so far for Plug Power (PLUG 2.75%) and its stock. The hydrogen production company and fuel cell maker soared in January after its CEO said it might not need to implement a previously announced $1 billion secondary stock sale.
It also announced the start of production at two of its hydrogen facilities. Investors sent shares rocketing higher in the wake of those announcements. But Plug shares have lost a large portion of those gains. And as of Friday afternoon, they had dropped by about 19% this week, according to data provided by S&P Global Market Intelligence.
NASDAQ: PLUG
Key Data Points
Plug Power is still struggling
This week's drop came after the company announced another move to shore up its finances, seemingly contradicting what CEO Andy Marsh had previously implied. In a Securities and Exchange Commission filing Tuesday, Plug said it was making a financial move that will end up costing it more cash.
The company is exchanging about $140 million in existing 3.75% convertible senior notes due in 2025 for new 7.00% notes due in 2026. While that gives the company an extra year before its notes mature, it will appreciably raise the interest expense on the funding.
Additionally, holders of the new notes could force Plug to repurchase them if the company experiences a "fundamental change" prior to the maturation date. The bottom line is that Plug Power is increasing its interest expenses and financial risk by making this change. That's not the sort of thing that the market likes to see, and investors should know that Plug will likely need further help through financing or government grants if it is ultimately to thrive.
