Plug Power Inc (NASDAQ:PLUG) shares slumped in heavy today after a report that warned they might fall even further than they have already fallen. The hydrogen fuel cell system maker was once fairly popular among investors, particularly those looking for green energy plays, but it has fallen out of favor over the last two years or so as it continues to operate in the red.

Plug Power Inc Slips Amid Warning

A host of problems for Plug Power

In a post on The Motley Fool, Scott Levine argues that Plug Power isn’t a good investment right now, not because it continues to lose money but because of a host of other problems that don’t exactly support a vote of confidence. He notes that sometimes it makes sense to invest in a company that’s losing money and hold shares for years until after they turn profitable. However, in Plug Power’s case, he believes investors have simply lost confidence, noting that in the middle of March 2014, there was a week when the average daily trading volume was 160.3 million shares, but the volume slumped to an average of 1.5 shares per day last week.

Levine believes investors might no longer trust Plug Power management and points to a huge red flag in their guidance. For example, CEO Andy Marsh said in December 2013 that the company would be breakeven on EBITDA by the end of 2014, but it failed to do so. Then in January, Marsh promised again that this would happen by the end of this year, which again he thinks is too bold considering that last year, Plug Power posted a $52 million EBITDA loss. Marsh also said that this year they will keep their operating expenses below $20 million, but in 2015, the company had $49 million in operating expenses.

Plug Power not using cash wisely

Levine also notes that the company hasn’t really used all the cash it has raised over the last couple of years very wisely as it grew its share count from 73 million to 176 million. He said returns on invested capital and equity “are worse than 40% below zero.” What’s worse is that Plug Power might have to go back and raise more equity again very soon because its cash pile is starting to dry up and it isn’t generating enough cash to keep up with its expenses.

And then there’s the comparison with peer FuelCell Energy, which is in a similar situation but trades at a lower multiple. As a result, he says Plug Power looks expensive and thus its shares might tumble even further.

He also warns that the company appears to be too dependent on individual customers such as Wal-Mart.