Plug Power Plummets Over 31% Premarket: What's Going On

Shares of hydrogen and fuel cell energy company Plug Power, Inc. PLUG plunged hard in premarket trading on Friday.

What Happened: The precipitous fall reflected jitteriness among investors after the company issued a “going concern” warning. In a 10Q filed with the SEC, the company said its deficit was at $3.8 billion at the end of the September quarter due to negative cash flows and net losses. The company also expects to generate operating losses for the foreseeable future.

The existing cash, and available-for-securities and equity securities will not be sufficient to fund operations through the next 12 months, Plug Power said.

“These conditions and events raise substantial doubt about the company’s ability to continue as a going concern,” it added.

Plug Power reported third-quarter net revenue of $198.71 million and a net loss of 47 cents per share. Both metrics missed the consensus estimates, which called for a net loss of 31 cents per share and revenue of $228.19 million. The company attributed the predicament to “unprecedented supply challenges” in the hydrogen network in North America.

Commenting on the results, KeyBanc Capital Markets analyst Sangita Jain said she has lowered the firm’s 2023 and 2024 estimates as she believes the management’s previously provided guidance will now take longer. She expects the 2024 guidance to be reduced along with the fourth-quarter results.

The analyst said a Department of Energy loan is still being worked out, adding that it will unlikely provide short-term liquidity relief.

“We would expect shares to remain under pressure until some sort of liquidity-enhancing measures are announced,” Jain said.

KeyBanc has a Sector Weight rating on Plug Power stock.

In premarket trading, Plug Power slumped 31.37% to $4.07, according to Benzinga Pro data. If the premarket losses carry into the regular session, the stock is on track to open at the lowest level since June 2020.

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