Plug power dives after the announcement will reflect the financial results
Plug the Power GenDrive fuel cell into GenFuel hydrogen.
Plug Power’s shares fell more than 16% on Wednesday after the company announced it would adjust its financial results for accounting errors.
In a filing with the Securities and Exchange Commission on Tuesday evening, the fuel cell maker announced that it would adjust its financial statements for fiscal years 2018 and 2019 and quarterly filings for 2019 and 2020.
The company said the accounting errors were primarily related to areas, including the impairment of certain long-lived assets as well as the deferral of losses for certain service contracts.
“There is no expected impact on our cash position, operations or the soundness of commercial arrangements,” Plug Power said in the filing, adding that the review revealed no wrongdoing.
The company said no issues were raised until the fourth quarter of 2020 and the preliminary year-end results announced on Feb.25. The filing added that the updated results will be published as soon as possible but did not give a specific date.
Based in Latham, New York, the company was a popular name with retail investors and was discussed on Reddit’s WallStreetBets forum.
The company’s shares, which went public in 1999, rose more than 970% in 2020. The strength continued through 2021, with the stock hitting an intraday high of $ 75.49 on Jan. 26 – its highest level in at least a decade.
The portfolio of the hydrogen fuel cell manufacturer Plug Power over the last decade
Amid the strength of the stock, CEO Andy Marsh sold his position for more than $ 37 million. This emerges from a filing with the SEC on January 21. The announcement stated that the earliest sale was on January 19, and Marsh’s retail price was between $ 62.25 and $ 68.43. The filing indicates that the transactions followed a pre-established 10b5-1 trading plan that allows insiders to sell stocks.
Even with the stock’s most recent bounce, stocks are still 97% below their all-time high of $ 1,565 per share after the dot-com bubble peak in 2000.
The sharp decline on Wednesday sparked a mixed reaction from Wall Street analysts.
Truist downgraded the stock to a hold rating, citing a lack of short-term opportunity. “We see only limited uptrend until liquidation, especially given a broader number of alternative energy-oriented stocks,” wrote analysts, led by Tristan Richardson, in a statement to clients. The company also lowered its target to $ 42 from $ 65, roughly the point the stock closed on Tuesday.
On the flip side, Canaccord Genuity, B. Riley, and Roth Capital Partners, all of whom have a Buy rating on the stock, said the stock pullback creates an attractive entry point for investors.
“We see a great buying opportunity in the adjustment of Plug’s accounting. … Growth investors will have the opportunity today to buy shares in PLUG, where we see plenty of catalysts in 2021 that we expect to quickly restore valuation” noted Craig Irwin of Roth Capital.
He referred to Plug Power’s initiatives for fuel cell trucks and small stationary fuel cells as catalysts.
The stock’s average street rating is overweight, while FactSet estimates the average price target is $ 63.
The stock closed at $ 42.68 on Tuesday and the stock rose 26% to close on Tuesday.
– CNBC’s Michael Bloom contributed to the coverage.