Plug Power Inc (NASDAQ:PLUG) expects to close its previously announced secondary offering on Wednesday, so many investors have rapidly unloaded shares on concerns about dilution. Investors started unloading their shares on Friday after the company priced its secondary offering at $5.50 per share.

Plug Power

Others have been selling in the wake of a report from analyst Trip Chowdhry of Global Equities Research. He decried the idea that fuel cells would be a viable source of power for cars, which of course would greatly limit the potential of Plug Power Inc (NASDAQ:PLUG)’s business.

Dilution becomes a problem for Plug Power

Seeking Alpha contributor Elephant Analytics points out that Plug Power Inc (NASDAQ:PLUG) has been gradually diluting its shares over the last couple of years. At the end of 2012, the company had about 38.2 million outstanding shares. By the end of last month, the company had 144 million. With this next offering, Plug Power could have as many as 167.1 million outstanding shares and 191.2 million fully diluted shares.

Nonetheless, the contributor thinks the share offering is a good idea because it does strengthen Plug Power Inc (NASDAQ:PLUG)’s balance sheet. The problem is that it narrows the company’s range. He says the low fair value price from Citron Research of 50 cents per share becomes too low, as Plug Power has up to $1.22 per share in cash. On the other hand, the rising number of shares pushes high-end estimates too high, simply because the number of shares is increasing again.

Fuel cells have no future in cars: analyst

As if the share dilution wasn’t a big enough problem, analyst Trip Chowdhry’s report about fuel cell cars also likely affected Plug Power Inc (NASDAQ:PLUG) today. He called fuel cell cars a “complete failure and non-event.” He said a typical car powered by fuel cells will take 11 seconds to get from zero to 60 miles per hour, which is far slower than Tesla Motors Inc (NASDAQ:TSLA)’s Model S. Tesla’s car hits 60 in just 5.4 seconds. In writing his report, the analyst drove one of Honda Motor Co Ltd (ADR) (NYSE:HMC) (TYO:7267)’s fuel cell cars.

Shares of Plug Power Inc (NASDAQ:PLUG) supplier Ballard Power Sustems Inc. (USA) (NASDAQ:BLDP) also slumped today, skidding as much as 2%.

Plug Power highlights GenKey

Meanwhile Plug Power Inc (NASDAQ:PLUG) said in a press release today that it will show off its GenKey hydrogen fuel cell solution at the 2014 Warehousing Education and Research Council trade show being held this week at the Chicago Hyatt Regency. The fuel cell provider’s vice president of sales and hydrogen is expected to speak about it tomorrow afternoon.