HomeBusinessWhy Plug Power Stock Soared This Week, But Dropped Friday Morning

Why Plug Power Stock Soared This Week, But Dropped Friday Morning

Plug-in power supply (NASDAQ: PLUG) The shares had a great week, at least until Thursday. The stock was up more than 20% on Friday morning in the company’s fourth-quarter earnings report. But shares tumbled after the market looked at that report.

Still, Plug Power stock was trading about 6% higher late Friday morning than where it started the week, according to data from S&P global market information. There was good news in the company’s earnings report, but investors decided to sell the news anyway.

You no longer have to worry about remaining a going concern

Perhaps the company’s best news was a change from what it said in its last quarterly report.

In its third-quarter report, management stated: “[W]We continue to incur losses and may never achieve or maintain profitability.” At the time, it officially issued a going concern alert to let investors know there was a chance it would not survive as a company.

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But on Friday the company said it “has concluded that there is no longer substantial doubt about the company’s ability to continue as a going concern.” In an earlier company update, CEO Andy Marsh told investors that while Plug Power had already reached an agreement with an investor to potentially issue another $1 billion in stock to raise capital, that might not be necessary.

For the full year, Plug Power’s revenue grew 27% to $891 million, a record for the company. It is now generating more revenue from green hydrogen production plants that have come on stream.

Focus on financial matters

CEO Marsh also says the right things. “We recognize past challenges in cash management and are committed to strengthening our financial profile in 2024,” he said. But 2023 revenue fell short of the analysts’ consensus estimate of more than $915 million.

After the stock’s sharp rise in the run-up to Friday’s report, many investors decided to take profits. That’s understandable, because it’s too early to know whether Plug Power will become profitable without having to raise more capital.

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Should you invest €1,000 in Plug Power now?

Consider the following before purchasing shares in Plug Power:

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Howard Smith has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Why Plug Power Stock Jumped This Week But Dropped Friday Morning was originally published by The Motley Fool

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