Plug Power Inc (NASDAQ:PLUG) shares were down 10% pre-market on Wednesday to $6.02 following Tuesday’s announcement of a secondary offering of stock. According to the documents filed with the SEC, the fuel-cell maker will sell 15 million additional shares.
Investors not happy with offering
On Tuesday, Plug Power Inc (NASDAQ:PLUG) stated that it is planning to offer and sell, subject to market conditions, common stock in an underwritten public offering. The company has hired Morgan Stanley & Co. LLC and Barclays Capital Inc as book-running managers, and Cowen and Company, LLC and FBR Capital Markets & Co. are acting as co-managers for the offering. Net proceeds from the offering will be used for working capital and general corporate purposes including capital expenditures and potential acquisitions.
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Plug Power shares dropped in extended trading after the announcement. This drop was in continuation with the 4.4% losses in the regular trading session.
Joint venture with Hysco
On Monday, Plug Power Inc (NASDAQ:PLUG) announced a joint venture with Hyundai Hysco CO Ltd. Both the companies signed a non-binding memorandum of understanding (MOU) to establish a joint venture partnership under which hydrogen fuel cells will be developed and sold throughout Asia, using Hysco’s stack and plate technology.
Hysco has set up a research center in South Korea to develop and offer innovative technology and research on fuel cell systems and fuel cell stacks to develop low-cost stack plate technologies.
More options for Plug Power
After the partnership with Hysco, Plug Power Inc (NASDAQ:PLUG) now can utilize three alternatives to obtain its fuel cells to be used in power electric forklifts. With the development of hydrogen fuel cells, the company wants to integrate it in the material handling devices instead of lead acid batteries.
At present, Ballard Power Systems is the primary supplier of fuel cells to Plug Power. Ballard Power Systems is focused on designing, manufacturing, and sale of fuel cells. Plug Power created a second option when it acquired fuel cell stack-maker, ReliOn.
With the partnership with Hyundai Hysco, Plug Power Inc (NASDAQ:PLUG) will not be over dependent on Ballard Power for vital components of its fuel cell systems. Also, the company would be able to penetrate in the material handling market in Asia, which CEO Andy Marsh claims to be $10 billion market.