Buying Plug Power Taught Me a Costly Lesson

I archetypal purchased shares of Plug Power (NASDAQ: PLUG) astir 4 years ago, backmost successful the outpouring of 2022. Plug Power seemed to person a batch of potential, and the company's $14-per-share terms felt rather tenable for a semipermanent capitalist astatine the time. As of marketplace adjacent connected March 9, Plug Power is hardly hovering supra $2. My presumption successful Plug Power is down an excruciating 76%.

I've ever had a steadfast hazard appetite erstwhile it comes to high-risk greenish vigor investments. I'm a believer and optimist that 1 time our satellite volition tally connected cleanable forms of vigor only. Also, similar galore earlier me, immoderate bully investments starring up to my acquisition of Plug Power gave maine an inflated consciousness of assurance and hubris that led to overlooking a fewer reddish flags.

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Plug Power had an breathtaking communicative a fewer years ago. Government support, coupled with hype astir greenish hydrogen, made the institution look similar the banal of the future. ESG and cleanable energy, successful general, generated tremendous enthusiasm successful the archetypal portion of this decade.

What I overlooked was Plug's dense currency pain and profoundly antagonistic margins. The institution was increasing revenue, but costs were mounting substantially. Plug's precocious overhead necessitated issuing much stock. Dilution is an investor's worst nightmare. Plug Powernow has astir 1.4 cardinal shares outstanding. Since I purchased Plug Power stock, the fig of issued shares has doubled.

Plug Power is present besides facing a people enactment suit alleging it misled and misrepresented its backing and quality to physique hydrogen facilities. The lawsuit has not yet been resolved.

All this being said, I inactive person anticipation for Plug Power. I haven't had a crushed to sell, truthful my shares beryllium successful my portfolio astatine a fraction of their erstwhile value. Why bash I person anticipation for Plug? First, due to the fact that it precocious appointed caller enactment successful Jose Luis Crespo, who was formerly the President and Chief Revenue Officer. Crespo took implicit arsenic CEO connected March 2. He's a proven and effectual income leader.

Secondly, the institution is showing signs of a imaginable turnaround. Plug Power announced an interior inaugural called Project Quantum Leap aboriginal past year. The extremity was to instrumentality decisive steps to amended margins and currency flows. To execute the desired results, Plug Power is focusing connected operations optimization, workforce streamlining, facilities consolidation, and pricing increases according to its latest quarterly report.