Plug Power Flashes 'Going Concern' Warning Following Downbeat Q3 Results; Stock Sinks Over 25%

Plug Power, Inc. PLUG, a manufacturer of hydrogen and fuel-cell energy, saw its shares lose more than one-quarter of their market capitalization in after-hours trading on Thursday after the company raised doubts regarding its ability to remain an ongoing concern.

Liquidity Concerns: While discussing the liquidity position in the 10-Q report filed with the SEC, Plug Power said its working capital at the end of the September quarter, including unrestricted cash and cash equivalents, was at $1.3 billion, with included unrestricted cash and cash equivalents of $110.8 million and restricted cash of $225.8 million. Available-for-sale securities and equity securities stood at $388.8 million and $67.8 million, respectively.

At the end of the third quarter, the company’s deficit was at $3.8 billion, as it continued to see negative cash flows from operations and net losses.

Plug Power said it expects to generate operating losses for the foreseeable future as it continues to devote significant resources to expand its current production and manufacturing capacity, construct hydrogen plants and fund the acquisition of additional inventory to deliver end-products and related services.

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.

The ability to continue as a going concern depends on whether Plug Power can raise additional capital, the company said. The management is currently evaluating several different options to enhance liquidity position, including the sale of securities, the incurrence of debt or other financing alternatives, it added.

The “management has concluded under the accounting standards that these plans do not alleviate substantial doubt about the Company's ability to continue as a going concern,” Plug Power said in the filing.

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Q3 Trails Estimates: Latham, New York-based 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 loss was also wider than the year-ago loss of 30 cents per share.

Plug Power said overall financial performance in 2023 has been negatively impacted by “unprecedented supply challenges” in the hydrogen network in North America. The company, however, said the issue would be transitory, provided its Georgia and Tennessee facilities to produce at full capacity by the year-end.

In after-hours trading on Thursday, the stock plunged 25.63% to $4.41, according to Benzinga Pro data. The final after-hours quote represents the stock’s lowest value since June 2020.

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