NEW YORK (TheStreet) -- Plug Power (PLUG) stock is trading lower Friday after the company announced it would sell 22.6 million shares, more than the 15 million it had initially planned to sell. The alternative energy company said it had priced the offering at $5.50 a share, an 8.5% discount to Thursday's close of $6.01.
By market open, shares had dropped -5.8% to $5.66.
Plug Power said it had also granted underwriters a 30-day option to purchase up to an additional 3.39 shares. The gross proceeds will be $124.3 million, while net proceeds are expected to total $116.3 million.
In a statement, the company said it intends to use proceeds for "working capital and general corporate purposes, which may include capital expenditures and potential acquisitions."
The offering is expected to close around April 30.
Morgan Stanley and Barclays are acting as the book-running managers, while Cowen and Company and FBR Capital Markets will act as co-managers for the offering.
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TheStreet Ratings team rates PLUG POWER INC as a Sell with a ratings score of D-. TheStreet Ratings Team has this to say about their recommendation:
"We rate PLUG POWER INC (PLUG) a SELL. This is driven by a few notable weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income and weak operating cash flow."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Electrical Equipment industry. The net income has significantly decreased by 240.8% when compared to the same quarter one year ago, falling from -$8.47 million to -$28.88 million.
- Net operating cash flow has significantly decreased to -$8.94 million or 93.52% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- PLUG POWER INC's earnings per share declined by 27.3% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, PLUG POWER INC continued to lose money by earning -$0.79 versus -$0.94 in the prior year. This year, the market expects an improvement in earnings (-$0.09 versus -$0.79).
- Compared to its closing price of one year ago, PLUG's share price has jumped by 4325.00%, exceeding the performance of the broader market during that same time frame. Regarding the future course of this stock, we feel that the risks involved in investing in PLUG do not compensate for any future upside potential, despite the fact that it has seen nice gains over the past 12 months.
- The revenue growth greatly exceeded the industry average of 4.7%. Since the same quarter one year prior, revenues rose by 35.6%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- You can view the full analysis from the report here: PLUG Ratings Report