Plug Power Funded to Success
Wednesday, September 11, 2013 at 7:56AMLast night Plug Power ($PLUG) announced a $10mm public offering. We decided to participate in the offering and if all goes well, our stake will increase meaningfully if we get the allocation we expect. There is no guarantee that this will happen until the offering closes.
Back in May of this year, PLUG received rescue capital to continue operations. However the overhang on the stock persisted due to the financing gap. This deal essentially closes the gap, as management plans to use this capital to carry the company until EBITDA breakeven sometime next year. Of course, there is risk to management's plans. But we feel strongly that management's assumptions are reasonable.
We are very excited about this transaction. We believe $PLUG is now funded for success. It is exhilarating to discover distressed situations with tons of potential. It gets even better when you can use your capital to help tip the needle towards success.
One of the things we pay close attention to in most of our investments is the activities of insiders. Officers and directors tend to be bullish in terms of what they say. Using personal capital to add to positions in distressed situations is an action that speaks volumes about the potential of the investment.
Certain of our officers, directors and existing stockholders, including certain holders of five percent or more of our voting securities and stockholders who are affiliated with certain of our directors, have indicated an interest in purchasing shares of our common stock in this offering at the public offering price. Plug Power Filing
Our investment thesis about $PLUG can be found here.
Written by Michael Bigger. Follow me on Twitter and StockTwits.
and by Jennifer Galperin. Follow me on Twitter and StockTwits.
Disclaimer: Bigger Capital, LLC, Bigger Capital Fund, LP, Bachelier, LLC and the Bigger family hold about 3% of Plug Power. We intend to increase our position if the company's results track our benchmark.
Plug Power is a highly distressed situation and it is not suitable for the majority of investors. The likely outcome of an investment is a loss of principal.
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