Industrials analyst Jay Van Sciver added Plug Power (PLUG) as a "Best Idea" Short on April 1, 2021. Shares of PLUG have fallen -94% since then, from over $35 a share to $2.32.
"What they are promising is stupid,” Van Sciver said following an earnings call for the hydrogen fuel cell company in 2021. “They don’t give you any of the technical information you’d really need to evaluate what they’re really doing, and that’s probably because it is exactly what it looks like ... I love the short side on this name.”
"It seems to be in the business of issuing shares of stock, even giving warrants to facilitate product sales at valuations that ended up being absurdly low. The behavior around the most recent equity offering looks dubious ... we see ~80% relative downside."
Following a drop of more than -15% today, the stock price is already down -50% YTD and -86% YoY.
"Yesterday after the close, PLUG entered into a market issuance agreement to sell $1 billion in common stock," Van Sciver said this morning on The Call @ Hedgeye. "Important context: PLUG only has a $1.5 billion market cap, which is still a lot considering it has a negative gross margin, meaning they actually go out and buy things and resell them at a loss."
"Cumulatively, they've issued $6.8 billion of stock since 1999, which is really spectacular value destruction to have raised so much capital and only cumulatively deliver $3.5 billion of revenue, and lost all the money. If you are a track-record investor, this could only be a short. This is spectacular amounts of money to incinerate."
"Good luck if you're the victim buying this. You can get in line, there's going to be a lot of lawsuits."
"What a call this has been," Keith McCullough added.
Watch the full clip from today's episode of The Call @ Hedgeye above.
