Plug Power has burned a bit over $70 million in the last twelve months, but that burn will come down as growth continues in 2020 and beyond. The $120 million raised ( net of fees, and with exercise of the underwriters’ allotment) should cover cash burn for the foreseeable future. That said, the balance sheet might be finally firmed up at this point. (I had thought Plug Power could get at least $3 per share, even assuming a discount to recent trading, and one wonders if the company could have received a better deal by waiting until this agreement was announced.) Dilution isn’t helpful, to be sure, and the price still looks a bit disappointing in the context of recent trading. The deal has another benefit: it changes the perception of December’s stock offering. Regardless, the win is another step toward Plug Power’s long-term targets and towards increased adoption of the company’s technology. It’s not yet clear who the customer is, though one analyst believes it’s likely a “multi-site” retailer, with Home Depot (NYSE: HD), Lowe’s Companies (NYSE: LOW), and Kroger (NYSE: KR) among the possibilities. It’s a nice step toward the aforementioned $1 billion target as well. And it is a big win: the average annual contract value of $86 million or so is over one-third of expected 2019 revenue. The win with such a large company is the first Plug Power has generated since 2017, when an expanded partnership with Walmart sent PLUG stock soaring. The unnamed customer is a member of the Fortune 100, which adds to a customer list that includes Amazon (NASDAQ: AMZN), Walmart (NYSE: WMT), and Procter & Gamble (NYSE: PG). The company announced last week that it had received a two-year contract worth $172 million. And the obvious worry just a month ago was that the 2019 rally was headed for a similar fate.īut the ‘new’ Plug Power re-emerged in time. ![]() Those gains, like so many before, quickly faded. Most notably, in 2013, Plug Power stock went from seemingly near bankruptcy to over $9 in roughly a year. The reaction to the offering seemed to be something along the lines of “same old, same old.” This is a stock that has made huge moves before. The offering wound up being priced at $2.75, a sharp discount that suggested institutional investors weren’t interested in paying up for the stock. It certainly looked like Plug Power had taken advantage of the rally to sell shares at possibly inflated prices. Plug stock dropped 11% on the news, and kept falling, returning to below $3 within a matter of weeks. 2, Plug Power announced a stock offering of 40 million shares. ![]() Investors clearly agreed with the bull case: PLUG climbed from barely $2 at the beginning of September to $4 at the end of November. My colleague Luke Lango argued that even missing the targets suggested PLUG stock could get to $4. I estimated at the time those targets suggested fair value of at least $7. A five-year plan released in September targeted $1 billion in revenue and Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) of $200 million. In December, it did look like Plug Power might be ready to disappoint investors once again. ![]() That in turn means that Plug Power stock should have more room to run. With more good news coming from the company this month, there’s increasingly a case that this time actually is different. PLUG stock has responded in kind, gaining 173% over the past twelve months. Yet the story slowly has changed in the past few quarters - and for the better. Shareholders have been diluted in a constant effort to raise funds: Plug Power had 43 million shares outstanding at the end of 2000, but the count will close this year at over 300 million. Financial targets have been missed repeatedly. Since inception, Plug Power has accumulated a deficit over $1.3 billion. After all, Plug Power has been one of the market’s longest-running serial disappointers.
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