Plug Power (PLUG) experienced a significant decline today, closing at $2.44, down 10.95% from the previous close of $2.74. The stock opened at $2.72 and briefly reached a high of $2.77 before plummeting to a low of $2.40. The trading volume was notably high at 94,642,047 shares, 146.06% of the average, indicating heightened trading activity.
The decline comes despite the announcement of a $1.66 billion loan guarantee from the U.S. Department of Energy (DOE) to support the construction of up to six hydrogen production facilities. While this news initially seemed positive, investor sentiment was dampened by concerns over Plug Power's financial health. The company reported a net loss of approximately $770 million for the nine months ending September 30, 2024, up from $443 million in the same period of 2023. This widening loss, coupled with the company's significant debt burden of nearly $930 million against less than $94 million in cash, has raised doubts about its ability to repay the loan.
Social media discussions reflect mixed reactions, with some users expressing skepticism about the loan's impact under the upcoming Trump administration. One Reddit user noted, "The reasons why the stock hasn’t gone up is probably mixed. My first guess is that investors don’t know what it means for the DOE loan when the Trump admin takes over." Another user highlighted the company's ongoing financial struggles, stating, "Plug has always been losing money."
Despite the potential for increased hydrogen production capacity, the market's reaction suggests a "buy the rumor, sell the news" scenario, as highlighted by a financial analysis article. The article pointed out that while the loan could triple Plug's hydrogen output, the company's history of financial losses and cash burn remains a significant concern.