Plug Power Inc. (NASDAQ: PLUG) has been on such a strong surge, up until Thursday, that we could not help but ask if the rally in the stock was coming to an end. Now we have news that the company is raising capital after such a strong run in the stock.

Plug Power has announced that the fuel cell company has priced an underwritten registered offering of 10,000,000 shares of common stock, with warrants to purchase 4,000,000 additional shares, to raise net proceeds of some $28 million. Plug Power’s market cap based on a $3.32 closing price was $340 million.

The shares and the warrants are fixed together, with each combination consisting of one share of common stock and 0.40 of a warrant to purchase one share of common stock. The warrants will have an exercise price of $4.00 per share, are immediately exercisable and will expire on January 15, 2019. The price on the offering was $3.00 per fixed combination, making for gross proceeds of $30.0 million.

Cowen & Company underwrote this offering, but where this gets interesting is that the securities were said to be placed with a single institutional investor. If that holds up to be the case, then Plug Power has a new largest shareholder.

The good news is that the capital is being used by the company on the surface. The press release showed that Plug Power will use the new capital for working capital and other general corporate purposes including, capital expenditures.

Shares of Plug Power closed down at $3.32 on Thursday, against a high this week of $4.90, and shares are actually indicated to be flat so far on the news on Friday morning.

Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.