What Happened?
Shares of fuel cell technology Plug Power (NASDAQ: PLUG) fell 14.9% in the afternoon session after the company announced a $375 million offering of convertible senior notes.
The debt, due in 2033 with a 6.75% interest rate, was offered to qualified institutional buyers. The stock's sharp drop reflected investor concerns about potential shareholder dilution. This risk arises because the notes can be converted into company stock, which would increase the total number of shares and could reduce the value of existing ones. Plug Power intended to use about $243 million of the proceeds to repay the principal and interest on its existing secured debentures.
The shares closed the day at $1.89, down 12.3% from previous close.
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What Is The Market Telling Us
Plug Power’s shares are extremely volatile and have had 101 moves greater than 5% over the last year. But moves this big are rare even for Plug Power and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was 2 days ago when the stock dropped 5.9% on the news that an analyst at Susquehanna lowered the price target on the stock, compounding worries from a difficult previous week.
The stock's decline continued a sharp downward trend from the previous week, when it fell more than 15%. Susquehanna cut its price target to $2.50 from $3.50, citing persistent uncertainty in the hydrogen market. This negative outlook overshadowed the company's recent announcement of a major contract win in the United Kingdom. Investors were also still processing a series of negative developments, including the company's decision to suspend its activities related to a $1.66 billion Department of Energy (DOE) loan. This followed a pause on clean energy project funding by the new administration. Furthermore, Plug Power's recent third-quarter results fell short of estimates, with the company reporting a 72% wider net loss compared to the previous year and a negative gross margin of nearly 68%.
Plug Power is down 19.1% since the beginning of the year, and at $1.89 per share, it is trading 54.4% below its 52-week high of $4.13 from October 2025. Investors who bought $1,000 worth of Plug Power’s shares 5 years ago would now be looking at an investment worth $79.23.
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