Within the first three buying and selling weeks of 2024 alone, Plug Energy (NASDAQ: PLUG) inventory had shed a whopping 40% in worth. The one saving grace for the hydrogen inventory could be its annual enterprise replace — buyers hoped the corporate would tackle a few of its greatest issues and assist the languishing inventory rebound.
That just about explains what’s occurred immediately: Plug Energy inventory surged on Tuesday and was up 15% as of 11:30 a.m. ET. The inventory had risen 23.9% earlier within the morning.
What replace did Plug Energy present this morning that despatched its inventory hovering, and will this be the purchase sign for this hydrogen inventory that buyers have lengthy waited for? Plug Energy inventory, in spite of everything, remains to be down practically 80% in a single 12 months after immediately’s leap.
New hydrogen plant and a giant mortgage
Plug Energy introduced the beginning of manufacturing at its inexperienced hydrogen plant in Georgia, additionally the most important liquid inexperienced hydrogen plant within the U.S. Plug Energy expects the plant to spice up its backside line and assist it develop gasoline margins. With a manufacturing capability of 15 tons of liquid electrolytic hydrogen per day, which is sufficient to energy 15,000 forklifts a day, the Georgia plant is bigger than Plug Energy’s different operational hydrogen plant in Tennessee.
A fair larger set off for Plug Energy inventory immediately, nevertheless, is funding. Plug Energy has been operating in need of money for a very long time now, however issues worsened to the purpose the place the corporate needed to concern a “going concern” warning final quarter, stating that it didn’t have sufficient money and fairness securities to run its operations for even the following 12 months. Plug Energy inventory crashed and ended 2023 down 63.6%.
This morning, Plug Energy introduced that it had finalized a term-sheet negotiation with the Division of Vitality (DOE) for a mortgage of $1.6 billion.
Must you purchase Plug Energy inventory now, earlier than it is too late?
Any infusion of money, even when within the type of a mortgage, could be a lifesaver for Plug Energy. The corporate wants cash to not solely run its operations but additionally fund its progress initiatives, which embrace not less than six hydrogen crops below improvement or building.
In the meantime, if Plug Energy’s expectations flip into actuality, the Georgia plant ought to assist the corporate reduce prices significantly. Excessive prices have been the most important progress hurdle for the hydrogen firm through the years, throttling its backside line regardless of rising income.
Immediately’s enterprise updates, due to this fact, are precisely what buyers in Plug Energy wished to listen to proper now. That makes Plug Energy value keeping track of now, however I would nonetheless advise buyers to attend till the corporate’s subsequent quarterly earnings name and administration’s outlook for 2024 earlier than shopping for the inventory.
Must you make investments $1,000 in Plug Energy proper now?
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Neha Chamaria has no place in any of the shares talked about. The Motley Idiot has no place in any of the shares talked about. The Motley Idiot has a disclosure coverage.
Plug Energy Surges on Essential Updates: Ought to You Purchase the Inventory Hand Over Fist Now? was initially printed by The Motley Idiot