Plug Power (PLUG) CEO Andy Marsh brushed aside Wall Street’s concerns about the future of the hydrogen fuel cell developer after PLUG stock plunged on the company’s going concern warning.
“We’re pretty confident when we look at everything,” Marsh told Yahoo Finance (video above). “If we look at our ability to manage this, we will cope. We’re talking to people about ways to do that. “We’re raising a lot more cash than we need. And we just try to do that prudently so that our investors are in a good position for the long term.”
Plug Power shares fell on Friday and remained under pressure on Monday. The selloff came after the company reported weaker-than-expected results and issued a “going concern” warning that it may not be able to fund operations next year.
“Given the Company’s projected capital expenditures and operating requirements under its current business plan, the Company expects that its existing cash, available-for-sale securities and equity securities will be insufficient to fund its operations for the next twelve months,” the company said wrote in a filing released Thursday. “These circumstances and events raise considerable doubts about the company’s ability to continue as a going concern.”
On Monday, Marsh painted a more optimistic picture of the company’s prospects, saying the company plans to proceed “prudently” so that investors are “in a good position for the long term.” He emphasized that the company has “no debt” and an “unlevered balance sheet of $5 billion.” Marsh also said Plug Power is considering a number of options, including debt financing to raise $500 million and slowing plant openings.
“I would be disingenuous if I didn’t say this is a bump in the road,” Marsh said. “But we have strong demand from large customers.”
Plug shares have fallen more than 70% since the start of the year as clean energy stocks come under severe pressure, driven by concerns about higher interest rates in a capital-intensive sector and falling valuations.
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Marsh added: “If the market grew a little faster it would be easier.”
In the third quarter, Plug Power posted a loss of $0.47 per share, wider than Wall Street’s expected loss of $0.30 per share. Net sales for the quarter were $198.7 million. The company’s net loss totaled $283.5 million for the quarter.
Andy Marsh, CEO of Plug Power, at a demonstration. (GLOBE NEWSWIRE) (Globe Newswire)
In its earnings release, the company blamed the loss on “unprecedented supply difficulties” for hydrogen, saying this contributed to volume constraints and delays in supply. The disruption comes as Plug plans to commission two new green hydrogen production facilities in Georgia and Louisiana. Marsh said the Georgia plant alone, scheduled to open later this year, would be enough to ease the pressure.
Following Plug’s results on Thursday, JPMorgan, Oppenheimer and RBC Capital downgraded the stock and lowered their price targets.
“While we believe Plug Power can overcome its current cash flow issues, the current operating and capital markets environment is challenging,” JPMorgan’s Bill Peterson wrote in a note to clients. The analyst downgraded the stock to Neutral and lowered his price target to $6 from $10 per share.
Akiko Fujita is an anchor and reporter for Yahoo Finance. Follow her on Twitter @AkikoFujita.
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