:max_bytes(150000):strip_icc()/GettyImages-2159852326-b98c4362c57343d49f031b733c0b5ff6.jpg "Plug Power Stock Is Plunging. Here’s What Investors Need to Know.")
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Key Takeaways
- Plug Power shares tumbled Wednesday after the hydrogen fuel cell maker announced a sale of $375 million in convertible notes.
- The company said it will use the money to pay off debt.
- The stock has lost 60% of its value since hitting a 52-week high in early October.
Plug Power (PLUG) shares sank Wednesday after the maker of hydrogen fuel cells announced it would sell $375 million in debt that could be converted into stock.
The company said the notes would pay a rate of 6.75%, and be sold to qualified institutional investors in a private offering. Plug Power said that it intends to use $245.6 million in net proceeds to pay off current debt having a rate of 15%, and $101.6 million plus cash on hand to pay off another debt at 7%.
Why This News Matters
Plug Power plans to raise $375 million through convertible debt to pay down higher-interest obligations, offering investors the option to convert the notes into stock. This news comes as the hydrogen fuel-cell maker has seen its shares slide recently after a big run-up in September.
The company said the notes can be converted into Plug Power stock at an initial rate of 333.3333 shares for every $1,000 of notes. That works out to a conversion price of about $3 per share—roughly a 40% premium over the stock’s Nov. 18 closing price of $2.14.
The conversions will be settled in cash, stock, or a combination of both. The notes cannot be converted until Feb. 28, 2026.
Shares of Plug Power were down 16% in mid-afternoon trading, at $1.80. The stock has lost 60% of its value since hitting a 52-week high of $4.58 in early October.
