Plug Power, a Reddit darling, dives after announcing it will restate financial results

Plug the Power GenDrive fuel cell into GenFuel hydrogen.

Source: socket

Plug Power’s shares fell more than 15% on Wednesday after the company announced it would adjust its financial results after accounting errors.

In a notification filed with the Securities and Exchange Commission on Tuesday evening, the fuel cell maker announced that it would adjust its financial year 2018 and 2019 and quarterly filings for 2019 and 2020.

The company said the accounting errors were primarily related to areas including the impairment of certain long-lived assets as well as loss provisions for certain service contracts.

“There is no expected impact on our cash position, business operations or the soundness of trade agreements,” Plug Power said in the filing, adding that the review did not reveal any wrongdoing.

The company said no issues were raised prior to the fourth quarter of 2020 and preliminary year-end results announced on Feb.25. The filing added that the updated results will be published as soon as possible without giving any specific date.

Based in Latham, New York, the company was a popular name with retail investors and was discussed on Reddit’s WallStreetBets forum.

The company’s shares, which went public in 1999, rose more than 970% in 2020. The strength continued through 2021, with the stock hitting an intraday high of $ 75.49 on Jan. 26 – its highest level in at least a decade.

The portfolio of the hydrogen fuel cell manufacturer Plug Power over the last decade

Amid the strength of the stock, CEO Andy Marsh sold his position for more than $ 37 million. This resulted in a report with the SEC on January 21st. The earliest sale was on January 19, with Marsh’s retail price ranging from $ 62.25 to $ 68.43. The filing indicates that the transactions followed a pre-established 10b5-1 trading plan that allows insiders to sell stocks.

Even with the stock’s recent bounce, stocks are still 97% below their all-time high of $ 1,565 per share after the dot-com bubble peak in 2000.

The sharp decline on Wednesday sparked a mixed reaction from Wall Street analysts.

Truist downgraded the stock to a hold rating, citing a lack of short-term opportunity. “We’re seeing limited uptrend before liquidation, especially given a wider range of alternative energy-oriented stocks,” wrote analysts, led by Tristan Richardson, in a statement to clients. The company also lowered its target to $ 42 from $ 65, roughly the point the stock closed on Tuesday.

On the flip side, Canaccord Genuity, B. Riley, and Roth Capital Partners, all of whom have a buy rating on the stock, said the stock pullback creates an attractive entry point for investors.

“We see a great buying opportunity in Plug’s accounting adjustment. … Growth investors will have an opportunity today to buy shares in PLUG, where we see plenty of catalysts in 2021 that we expect to quickly restore valuation,” noted Craig Irwin of Roth Capital.

He referred to Plug Power’s initiatives for fuel cell trucks and small stationary fuel cells as catalysts.

The stock’s average street rating is overweight, while FactSet estimates the average price target is $ 63.

The stock closed at $ 42.68 on Tuesday and the stock rose 26% to close on Tuesday.

– CNBC’s Michael Bloom contributed to the coverage.

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