Power News: Why PLUG Stock Is Plunging 9% Today

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Plug Power (NASDAQ:PLUG) is in the news Tuesday after announcing a new public offering that has it devaluing shares of its stock.

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The Plug Power upsized public offering has it adding 38 million shares of PLUG stock to the market at a price of $22.50. That’s worth noting as the closing price for PLUG stock on Monday was $25 per share.

It’s easy to understand why Plug Power stock is falling following this news. When the company’s own public offering of shares is lower than the current price, it only makes sense that the shares would lose value.

Another thing to note about the upsized offering is the additional shares available to the underwriters. They have a 30-day option to buy an additional 5.7 million shares of PLUG stock at the public price, less the underwriting discount. In this case, Morgan Stanley is the sole book-running manager of the public offering.

The oversized public offering news from Plug Power comes just a week after the release of its earnings report for the third quarter of 2020. The results went over well with investors after the company beat out estimates and set a revenue record during the quarter.

Keeping its positive performance in mind, investors might want to consider taking a stake in PLUG stock. The company appears poised to grow in the coming years and buying on this dip could be a smart idea.

PLUG stock was down 9.2% as of Tuesday morning but is up 600.9% year-to-date.

On the date of publication, William White did not have (either directly or indirectly) any positions in the securities mentioned in this article.


Article printed from InvestorPlace Media, https://investorplace.com/2020/11/plug-power-news-drops-stock/.

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