Plug Power could be a house of cards, stumbling if and when the music stops. Plug Power is running out of capacity to enter such transactions, and may require additional dilution in order to sustain growth. In Spruce Point’s opinion, this financing is unsustainable. Then, PLUG finances the deal via a sale/leaseback with a third-party. In other words, instead of customers buying Plug Power products - then entering a sale/leaseback agreement with a third-party financing company - they are leasing the equipment directly from Plug Power. A key element of their case is the company’s aggressive use of expanded lease financing. In December, Spruce Point Management - who is short Plug Power stock - released a detailed report making the bear case for the PLUG stock. But per the last quarterly filing, there’s 217.9 million shares of dilutive potential common stock. After last fall’s stock offering, there’s now around 291.8 million shares of PLUG stock outstanding. In both transactions, Plug Power issued warrants to the retail giants, in exchange for their business.Īdditionally, dilution is part and parcel to the Plug Power story. At first glance, it’s impressive Plug Power signed on big names like Amazon and Walmart. In past analysis, I’ve harped on the capital structure of PLUG stock. With that, each step closer to this target could send PLUG stock to even further highs.īut, what’s the catch? What are speculators ignoring as they bid up PLUG stock? While there could be a “new paradigm” with regards to hydrogen fuel cell adoption, there’s red flags aplenty that could eventually catch up with the company. Namely fuel cell-powered passenger and commercial vehicles.Īlong with continued strength in the company’s material handling sales (forklifts), it’s possible the company hits their ambitious 2024 goals of $1 billion in revenue, and $200 million in adjusted EBITDA. 4 PLUG stock article, there are other needle-moving catalysts in the pipeline. Based on InvestorPlace contributor Larry Ramer’s Feb. They already use Plug Power’s GenDrive products in their warehouse operations. For businesses with large warehouse operations, moving to forklifts powered by alternative energy looks like a smart move.Īmazon (NASDAQ: AMZN), Walmart (NYSE: WMT) and others agree. Large companies left and right are looking to “go green”. While in most cases that’s a precursor to a bubble pop, I concede this time the bulls could be right. But, as the bulls like to say, “it’s different this time”.ħ Failing Tech Stocks to Disconnect From Now Is Plug Stock Headed to $8 and Beyond?Īs mentioned above, PLUG stock is fast reaching highs it last set in the mid-2010s. So, let’s dive in and see why the time is right to start going bearish on PLUG stock. InvestorPlace - Stock Market News, Stock Advice & Trading Tips With hype going parabolic, Plug Power shares are “priced for perfection.” While new developments could mean more upside, fundamental flaws to the company’s business model persist. Nevertheless, as strange as it may seem, now may be the time to sell PLUG stock.
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