Shares of Plug Power, the hydrogen-technology company, experienced a double-digit increase following the announcement of an impending significant government loan. The stock soared by 16% to $3.31 during Tuesday's trading session, in contrast to the S&P 500's slight dip of 0.1%.
In a conference call on Tuesday, CEO Andy Marsh disclosed that Plug Power and the Department of Energy have successfully concluded negotiations for a $1.6 billion loan facility. Marsh expressed excitement about the potential impact of the funding, stating, "This financial support, once received, will play a vital role in advancing green hydrogen deployment in the United States by facilitating the development, construction, and ownership of up to six hydrogen production facilities." This news comes as a relief to investors who have witnessed an 80% decline in shares over the past year, with the company even issuing a warning about its ability to continue as a going concern.
The stock faced further turbulence earlier this month when Plug Power entered into an agreement with broker B. Riley to sell up to $1 billion in new shares. This move would inevitably dilute the holdings of existing shareholders and led to a sharp decline in stock value.
During the conference call, Plug Power management emphasized their commitment to efficient cash management and addressing the financial challenges at hand. To this end, the company has implemented a hiring freeze and plans to reduce payroll costs through natural attrition.
Additionally, Plug Power announced the commencement of operations at a Georgia plant dedicated to the production of liquid green hydrogen.