In the first three trading weeks of 2024 alone, Plug Power (NASDAQ: PLUG) stock had shed a whopping 40% in value. The only saving grace for the hydrogen stock would be its annual business update — investors hoped the company would address some of its biggest concerns and help the languishing stock rebound.
That pretty much explains what’s happened today: Plug Power stock surged on Tuesday and was up 15% as of 11:30 a.m. ET. The stock had risen 23.9% earlier in the morning.
What update did Plug Power provide this morning that sent its stock soaring, and could this be the buy signal for this hydrogen stock that investors have long waited for? Plug Power stock, after all, is still down nearly 80% in one year after today’s jump.
New hydrogen plant and a big loan
Plug Power announced the start of production at its green hydrogen plant in Georgia, also the largest liquid green hydrogen plant in the U.S. Plug Power expects the plant to boost its bottom line and help it expand fuel margins. With a production capacity of 15 tons of liquid electrolytic hydrogen per day, which is enough to power 15,000 forklifts a day, the Georgia plant is larger than Plug Power’s other operational hydrogen plant in Tennessee.
An even bigger trigger for Plug Power stock today, however, is funding. Plug Power has been running short of cash for a long time now, but things worsened to the point where the company had to issue a “going concern” warning last quarter, stating that it did not have enough cash and equity securities to run its operations for even the next 12 months. Plug Power stock crashed and ended 2023 down 63.6%.
This morning, Plug Power announced that it had finalized a term-sheet negotiation with the Department of Energy (DOE) for a loan of $1.6 billion.
Should you buy Plug Power stock now, before it’s too late?
Any infusion of cash, even if in the form of a loan, would be a lifesaver for Plug Power. The company needs money to not only run its operations but also fund its growth projects, which include at least six hydrogen plants under development or construction.
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