PLUG - Why Plug Power Stock Plunged 30% in June
2024-07-08 15:38:03 ET
Shares of Plug Power (NASDAQ: PLUG) slumped 30% in June, according to data provided by S&P Global Market Intelligence . Investor interest in the hydrogen stock picked up in recent months after the cash-strapped company secured a large conditional loan guarantee to fund its growth plans. A development in June, however, means the funding could run into a roadblock, and that triggered panic selling in Plug Power stock.
After issuing a " going concern " warning in late 2023, Plug Power said it had resolved the issue in March after signing an agreement to sell shares to investment bank B. Riley Securities and securing a term sheet with the Department of Energy (DOE) for a loan of $1.6 billion. In May, Plug Power even received a conditional commitment for a loan of up to $1.66 billion from DOE to fund the construction and development of up to six green hydrogen production plants.
In June though, U.S. Senator John Barrasso, a ranking member of the Senate Committee on Energy and Natural Resources, asked the DOE's inspector general to investigate the department's conditional commitment to Plug Power on grounds of potential conflicts of interest between the DOE's Loan Programs Office and its director, Jigar Shah. For context, Shah co-founded a company that lent money to Plug Power, which the latter repaid ahead of schedule as it started pursuing a DOE loan.
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Why Plug Power Stock Plunged 30% in June