.July 19, 2024 09:56 AM

Piper Sandler analysts reiterated an Underweight rating and $2.50 price target on Plug Power (NASDAQ:PLUG) following a $200 million equity offering to fund operations, causing shares to drop over 13% pre-market. Cash burn, choice of equity offering over ATM program, and concerns about operations were raised.

Total cash burn for Plug Power, adjusted for beginning cash from ATM, was at least $295 million, with unrestricted cash burn around $255 million. Uncertainty remains about additional cash drawn from ATM between May 9 and June 30.

Plug Power deployed over $200 million in products and services in Q2, expecting lower revenues due to accounting rules. Workforce reductions, price increases, and monetizing credits are part of efforts to improve margins for Q2 2024.

Analysts are looking for more insight into the strategic reasoning behind the equity offering, rather than using the ATM, and the potential forward margin trajectory during the upcoming earnings report.