Plug Power Inc. (NASDAQ:PLUG) shares held steady near $2.21 during afternoon trading on Thursday, as the company's proposed $80 million liquidity initiative faces scrutiny over its cash burn rate. The stock slipped 0.9%, outperforming the broader market as the Nasdaq Composite dropped 2.4%.
The hydrogen fuel cell company reported unrestricted cash of approximately $162 million as of June 30. However, the anticipated short-term liquidity is expected to cover only about 50% of the operating and capital cash consumption for the first quarter. This has raised concerns among investors about the company's ability to sustain operations without further capital raises.
Plug's operations consumed $150 million in the first quarter, with capital expenditures adding another $8.1 million, bringing total cash used to $158.2 million. At this run rate, the June cash balance would cover roughly 3.1 months. Factoring in the projected $80 million in liquidity, coverage extends to more than 4.6 months. These projections assume first-quarter expenditure levels recur and scheduled transactions are finalized, and do not represent official company guidance.
The company is pursuing several asset sales to bolster its cash position. The sale of its Graham, Texas, project is expected to close on or about July 31, with Stream US Data Centers providing $50 million at closing and an additional $26.5 million contingent on verified grid capacity. The deal may also free approximately $14 million in collateral, potentially delivering up to $90.5 million in total liquidity. Meanwhile, the revised New York deal is set at a firm $142 million price, with the closing deadline pushed to March 31, 2027, pending regulatory and environmental approvals.
In the first quarter, Plug Power saw stronger operational results. Revenue climbed 22% to $163.5 million, and gross margin improved to negative 13% from negative 55% a year earlier. The adjusted loss narrowed to eight cents per share. Chief Executive José Luis Crespo stated that the company remains focused on improving margins, managing liquidity, and growing the sales pipeline.
Despite these improvements, risks remain elevated. Both transactions are subject to closing conditions, and the Texas earnout is contingent on completed grid capacity. Weighted average shares increased 47% year-over-year in the first quarter, highlighting continued dilution as a significant concern for investors. Trading volumes have been subdued, with Tuesday's 6.6% gain occurring on volume 43% below its 50-day average, and Wednesday's turnover roughly 60% below average.
Relative stock strength offers little indication of a near-term recovery. The shares ended at $2.17 following the announcement of the liquidity plan on July 13, and continue to trade about 52% below their 52-week peak. The upcoming second-quarter earnings report will be critical in determining whether cash burn has eased, though Plug has not yet disclosed a reporting date.
