Pulling the Plug – Dilution Could Make the Spiral Down the Drain Faster

Key Points

Plug Power issues equity quarterly to meet its cash burn, and as the stock falls, dilution worsens. Eventually, the option of issuing equity could disappear – absent a rapid turnaround in revenue/earnings, Plug is in trouble.
As traditional capital markets for Plug close, borrowing further against fixed asset values might be another option. Danimer Scientific has gone down this path but is now out of options and in more trouble than Plug.
Plug’s conditional DOE loan is unlikely to help the company, as it is intended for the construction of hydrogen projects and cannot be used for general expense coverage. Plug has limited options and may need a bail-out.
Otherwise, we have only two new projects to discuss this week, both in the EU and both requiring lots of public funding. We examine the still weak crop markets but relatively robust ammonia and discuss Texas power.

Exhibit 1: Plug Power is pouring out money – is it going down a drain?