“We feel pretty confident when we look at everything,” Marsh told Yahoo Finance (video above). “When we look at our ability to manage through this, we’re going to be fine. We’re talking to folks about opportunities to raise cash much larger than what we need. And we’re just trying to do it prudently so that our investors are in a good position in the long run.”
Plug Power shares tanked on Friday and remained under pressure on Monday. The sell-off came after the firm posted weaker-than-expected results and issued a “going concern” warning about its potential inability to fund operations over the next year.
“In light of the company’s projected capital expenditure and operating requirements under its current business plan, 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,” the company wrote in a filing published Thursday. “These conditions and events raise substantial doubt about the company’s ability to continue as a going concern.”
On Monday, Marsh painted a rosier picture of the company’s outlook, saying the firm planned to move “prudently” so investors “are in a good position in the long run.” He stressed that the company had “zero debt” along with a “$5 billion unleveraged balance sheet.” Marsh also said Plug Power is considering a range of options, including debt financing to raise $500 million, as well as slowing plant openings.
“I’d be disingenuous if I didn’t say this has been a bump on the road,” Marsh said. “But we have strong demand by major customers.”
Plug shares have fallen more than 70% year-to-date, as clean energy stocks take an outsized beating, driven by concerns about higher rates in a capital intensive sector, and falling valuations.
Marsh added that “if the market was growing a little bit faster, it would be easier.”
In the third quarter, Plug Power posted a loss of $0.47 per share, steeper than the $0.30-per-share loss expected by Wall Street. Net revenue for the quarter came in at $198.7 million. The company’s net loss in the quarter totaled $283.5 million.
In its earnings release, the firm blamed the loss on “unprecedented supply challenges” for hydrogen, saying that contributed to volume constraints and deployment delays. The disruptions come as Plug looks to bring online two new green hydrogen production plants in Georgia and Louisiana. Marsh said the Georgia plant alone, scheduled to open at the end of this year, would be enough to relieve the pressure.
Following Plug’s results Thursday, JPMorgan, Oppenheimer, and RBC Capital all downgraded the stock and lowered their price targets.
“While we believe Plug Power can cycle past its current cash flow issues, the current operating and capital markets environments are 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.