Shares of Plug Power PLUG-Q plunged nearly 30 per cent in premarket trading on Friday after the hydrogen fuel cell maker raised going concern doubts.
The liquid hydrogen market in North America has been severely constrained by frequent force majeure events, leading to volume constraints, which have delayed Plug’s deployments and service margin improvements, the company said on Thursday.
Plug has been facing liquidity issues and has lost more than half of its market capitalization since the start of the year. Its annual financial performance has also been impacted by “unprecedented” supply challenges in the hydrogen network in North America.
“The company is projecting that its existing cash and available for sale and equity securities will not be sufficient to fund its operations through the next twelve months,” Plug said.
The company would need to tap additional capital to fund its activities.
The company said it was pursuing a number of debt capital and project-financing solutions, including corporate debt and a loan program of the U.S. Department Of Energy.
The Latham, New York-based Plug said cash and equivalents at the end on Sept. 30 stood at $110.8-million.
“While we believe Plug Power can cycle past its current cash flow issues, the current operating and capital markets environments are challenging and we believe PLUG shares are likely to be range bound over the next several quarters until clarity around its balance sheet are sorted out,” J.P. Morgan analyst Bill Peterson said.
Plug on Thursday also reported a bigger loss for the three months ended Sept. 30 and its revenue of $198.7-million widely missed estimate of $228.2-million, according to LSEG data.