Plug Power (NASDAQ:PLUG) shares declined 1.9% to $2.05 in afternoon trading on Friday, giving back some of the gains from Thursday's 10% surge. The pullback comes as investors scrutinize the company's cash burn following the closing of a key asset sale in Texas.
The Graham, Texas, transaction, which was expected to close by July 31, involves the sale of land and 164 megawatts (MW) of grid-interconnection capacity. Plug Power will receive $50 million at closing, with an additional $26.5 million contingent on the final load capacity. At the maximum price, the deal values the assets at roughly $466,000 per MW.
According to the company, the Graham project could provide up to $90.5 million in total liquidity, including the release of collateral. This amount represents approximately 60% of the operating cash used in the first quarter of 2026, offering a temporary cushion but not a fundamental solution to the company's ongoing cash consumption.
The news comes amid a mixed performance for the hydrogen sector. While Bloom Energy (NYSE:BE) rose 4% to $215.44, other peers like FuelCell Energy (NASDAQ:FCEL) fell 2.2% to $23.11, and Ballard Power Systems (NASDAQ:BLDP) declined 1.6% to $2.75. Plug Power's market capitalization stands at $2.85 billion, less than one-twentieth of Bloom's $69.68 billion valuation.
Bloom Energy reported second-quarter revenue of $1.07 billion, a 166% increase year-over-year, with a GAAP gross margin of 33.4%. In contrast, Plug Power's most recent quarterly revenue was $163.5 million, with a negative gross margin of -13.2%. The disparity highlights the different trajectories of the two companies, with Bloom capitalizing on the AI-driven data center boom while Plug Power focuses on securing grid connections rather than hydrogen production itself.
Plug Power's preliminary unrestricted cash as of June 30 was $162 million, down $61.2 million from March 31. The company expects to receive more than $80 million from the Texas deal and other near-term liquidity measures, which would bring pro forma cash holdings above $242 million. That would exceed the March total by at least $18.8 million, but it would only cover about 4.8 months of first-quarter operating expenditures.
The company's first-quarter results showed revenue growth of 22.3% to $163.5 million, while the GAAP gross loss narrowed to $21.6 million from $73.9 million a year earlier. However, operating cash outflow increased 42.1% to $150 million, and weighted average shares outstanding jumped 46.9% to 1.39 billion, further diluting shareholders.
CEO José Luis Crespo emphasized that monetizing assets was a key part of the company's strategy this year. Plug Power said second-quarter earnings would be released soon, with expectations to detail operating cash outflows separately from cash received from asset sales.
The Texas deal remains subject to certain conditions, and the $26.5 million contingent payment could be reduced or not received at all. Additionally, a larger transaction in New York is pending regulatory reviews through March 2027. Plug Power's filings also highlight anticipated capital and liquidity requirements, underscoring the ongoing challenges the company faces in achieving sustainable profitability.
