Plug Power’s $375M Convertible Notes Offering Sparks 21% Stock Plunge
Plug Power Inc. faced sharp investor backlash after pricing a $375 million convertible debt offering, with shares tumbling 21% on dilution concerns. The hydrogen fuel cell specialist sold 6.75% senior notes due 2033 at a 5% discount, potentially raising $399.4 million if underwriters exercise their full option.
The capital restructuring carries strategic tradeoffs: $245.6 million will retire high-cost 15% secured debentures, while another $154 million targets 2026-maturing notes. Conversion terms at $3.00 per share represent a 40% premium to recent prices, but could flood the market with 125 million new shares.
While the deal extends debt maturities and reduces near-term interest expenses, it introduces unsecured obligations subordinate to subsidiary liabilities. Market reaction highlights the precarious balance between balance sheet repair and equity holder dilution in growth-stage cleantech finance.
