Plug Power (NASDAQ:PLUG) stock will likely continue to be put through the wringer this year as the hydrogen fuel cell company faces a class-action lawsuit from shareholders over alleged misleading statements regarding the construction of its green hydrogen production plants.
What do you need to know about Plug Power lately?
Well, Plug is currently under fire from Hagens Berman, a Seattle-based law firm known for its class-action lawsuits.
The lawsuit, filed yesterday, accuses Plug of overstating its ability to alleviate the negative effects of supply constraints and materials shortage. As well as the adequacy of its cash and capital on hand. Plug also allegedly overstated the short-term prospects of its hydrogen production and the potential of expanding such operations.
Additionally, it alleges that Plug repeatedly experienced delays related to the construction of its green hybrid production facility. And struggled to secure external funding for its growth plans, which it repeatedly downplayed.
According to the lawsuit, investors learned the truth of the matter in early November when Plug announced its “dismal” third quarter 2023 results. In its earning report, Plug notified investors of its current liquidity issues, and expressed doubt about continuing forward with its hydrogen production.
“We are investigating whether Plug may have deceived investors about the sufficiency of its liquidity,” said Hagens Berman Partner Reed Kathrein, lead of the firm’s investigation.
Hagens Berman encourages investors who have substantial losses between May 9, 2023, and Jan. 16, 2024 or have knowledge that may be beneficial to the investigation to contact the firm.
PLUG Stock Continues to Tumble Amid Legal Snafu
With Plug already dealing with internal struggles related to its hydrogen fuel cell business, the lawsuit only adds fuel to the fire.
PLUG stock is down about 25% year-to-date, even as the S&P 500 is up nearly 11% over the same period.
Investors have largely abandoned PLUG, with many analysts recommending selling the stock as the company continues to struggle with funding and meeting growth and expansion goals.
On the date of publication, Shrey Dua did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
