Why Plug Power, Blink Charging and JinkoSolar shares crashed today
What happened
Renewable Energy Stocks are making headlines again on Wednesday, as the shares of the hydrogen fuel cell star Plug hole (NASDAQ:PLUG) collapsed 7.1% at 1:45 p.m. EST, followed in quick succession by the electric car charging company flashing charging (NASDAQ: BLNK) down 9%, and the solar module manufacturer JinkoSolar (NYSE:JKS) down 8.7%.
And for a change, there seems to be some news behind the big moves in renewable energy stocks today.
So what
In the case of Plug, we seem to be seeing investors return the gains accrued yesterday. It’s not too surprising. After all, The Wall Street Journal just released a big, largely negative talk on the future of the fuel cell industry. Although Rival Plug Bloom energy – not Plug – was the focus of this particular article, and Bloom takes the worst of the damage today, Bloom’s dismantling seems to have a ripple effect on the fuel cell industry and drags Plug along with it.
At Blink, investors were just reminded of Citron Research’s recent negative report on the company, when Blink’s CEO took to CNBC to challenge the short seller claims and dismiss his criticisms that Blink spends no money on research and development (R&D) and has “no real income”. It may have been a tactical error on the part of the CEO, however, reminding investors to check these numbers – which, in the end, confirm that Blink spent zero dollars and zero cents on R&D work for five consecutive years and has recorded just $4.5 million in revenue over the past 12 months.
Now what
Now let’s look at JinkoSolar, which actually has the biggest news to report today – and not the good news either.
Very early this morning (4:12 a.m. EST, actually), JinkoSolar announced plans to issue and sell $100 million of new U.S. Tender Shares, pricing them at whatever price the market is willing to pay. Unfortunately for Jinko shareholders, that price is now almost 10% lower than it was before Jinko made its announcement – around $56 and changing. At this price, Jinko will have to issue approximately 1.8 million ADSs and dilute its shareholders by nearly 4% of their stake in the company in the process.
Jinko didn’t say exactly why he needed the money, but it’s not hard to guess. The company has not generated any positive free cash flow from its business since 2012 and has accumulated cash losses (cash burn) of $2.6 billion from 2013 to 2019, according to a count prepared by S&P Global Market Intelligence. The company’s last filing with the SEC did not contain a cash flow statement, so it is difficult to know for certain that this cash burn situation continues into the current year. But given that reported cash levels declined sequentially between Q2 and Q3, I guess Jinko’s cash fire is still pretty hot.
With the share price having nearly tripled over the past year, now seems a good time to raise money and fuel that fire – but you can’t expect current shareholders to be happy.
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