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Plug Power (NASDAQ:PLUG) just secured a massive $1.66 billion loan guarantee from the U.S. Department of Energy (DOE) to fund up to six hydrogen production plants across the U.S., kicking off with a wind-powered facility in Graham, Texas. CEO Andy Marsh called it a "significant step" in expanding domestic clean energy and hydrogen manufacturingpositioning Plug at the heart of the hydrogen economy. With existing plants in Georgia, Tennessee, and Louisiana producing 45 tons of hydrogen per day, this move could dramatically scale operations.
But Wall Street isn't buying it. Despite the long-anticipated funding, Plug Power's stock tumbled nearly 8% this morning after the announcementa textbook "buy the rumor, sell the news" reaction. Analysts at Oppenheimer acknowledged the milestone but flagged concerns over liquidity, with Plug set to tap the loan within the next three months for the Texas project. The bigger issue? Plug Power is burning over $1.3 billion annually, sitting on nearly $930 million in debt, and hasn't posted a profit in 28 years. Investors are questioning whether this capital injection will fuel real growthor just keep the company afloat a little longer.
The loan gives Plug more time, but time isn't profitability. Investors will be watching the next earnings call closely for signs of execution, potential partnerships, andmost importantlya path to positive cash flow. Until then, the stock remains a tough sell in a market that's rewarding results, not just potential.
This article first appeared on GuruFocus.