Plug Power share price plunges by 40% after firm admits it could fold in next 12 months
The firm has seen major losses this quarter owing to H2 supply disruption
US green hydrogen technology firm Plug Power’s share price has fallen by 40% since Friday, when it admitted in its third-quarter results that its supply network had been massively disrupted by a combination of planned outages and force majeure — with the company warning that it may fold in the next year due to continued operating losses.
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This also led to a knock-on effect for Plug’s traditional business of material handling — ie, fuel-cell forklifts.
“We left the quarter with seven sites we couldn’t bring on line, which would have represented well over $15m in revenue, because we couldn’t put more stress on the network,” Marsh said.
As it stood, the firm’s revenue for the quarter only reached $199m — a sharp drop from the $260.2m it raked in for Q2 — with a gross margin of minus 69%, compared to the previous quarter’s gross loss of 30%.
Plug’s shares were trading at $5.93 at close last Thursday, but closed at $3.53 on Friday evening.
In a 10Q filing to the US Securities and Exchange Commission, the company further revealed that 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 our end-products and related services”, with its accumulated deficit reaching $3.8bn at the end of September.
As such, Plug is “projecting that its existing cash and available for sale and equity securities will not be sufficient to fund its operations through the next twelve months”.
“Good news is, the network is now stabilised and many of the planned outages have subsided,” he said, noting that the Tennessee plant would be back on line by the end of the year.
“One of our major suppliers is upgrading one of their facilities to allow the plant to operate at full nameplate capacity in the coming months,” he added, noting that that facility’s output to date had only produced a maximum 25% of capacity.
Plug also plans to start up 15 tonnes a day of extra capacity from its new liquid green hydrogen plant in Georgia by 15 November — although this had originally been scheduled for Q3.
“We’re continuing to see progress at our Georgia plant, and we’re finishing the last steps of the construction process, commissioning the last liquefier,” Marsh said.