Power delivery (NASDAQ: Delivery) The stock rose more than 10% in early trading Tuesday, hitting $3 a share before giving up most of its gains and falling to single-digit gains. As of 10:20 a.m. ET, component inventory is still up, but only by 2%.
So why connect the power It rises in the first placeWhy did she give up her gains so quickly?
In a note issued this morning, the investment bank Morgan Stanley Plug Power is expected to receive DOE approval for a $1.7 billion loan by the end of this week, StreetInsider.com just reported. As the analyst explained, the Biden administration will likely approve this loan before President Trump’s inauguration “to reduce the risk of potential recovery of this loan.”
Assuming Morgan Stanley is right, Plug Power is poised for a significant rise in its stock price once loan approval becomes official.
So you should buy Plug Power stock, right? Well, not so fast.
The loan approval would be good news if that happens, no doubt. But Morgan Stanley still doesn’t think the stock is a “buy,” and in fact reiterated its “underweight” (i.e., “sell”) rating on Plug shares, holding on to a price of $1.75 per share. Target price On stocks.
Why did MS do this? Because according to the banker, even $1.7 billion in government money wouldn’t be enough to provide for Plug Power. Remember, the company burned $1.8 billion in cash in 2023. It continues to burn cash through 2024 — about $892 million in the first three quarters, which means about $1.2 billion of negative free cash flow for all of 2024.
With less than $100 million in cash remaining, and more than $900 million in debt already accumulated, Morgan Stanley believes Plug Power will have to raise at least $500 million in cash this year, through the sale of new shares.
Loan or no loan, Plug Power stock remains a sell.
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