Plug Power (PLUG) Drops 8% on Dilution Impact of Capital Stock Hike Plan

We recently published 10 Big Names Stumbling Hard. Plug Power Inc. (NASDAQ:PLUG) was one of the worst performers on Monday.

Plug Power dropped its share prices by 8 percent on Monday to close at $2.3 apiece as investors digested the potential dilution impact of its proposal to double its capital stock.

In a notice to its investors last week, Plug Power Inc. (NASDAQ:PLUG) said that it is planning to raise its authorized capital stock to 3 billion from 1.5 billion at present to meet its financial obligations, maintain operating flexibility, and continue executing its business plan.

Should shareholders reject the initiative, Plug Power Inc. (NASDAQ:PLUG) would implement a reverse stock split in order to create sufficient share availability to meet its financial obligations and maintain business flexibility.

Apart from the capital stock hike, it would also seek approval of the shareholders to modernize voting standards that would allow certain future charter amendments to be approved by a majority of votes cast, where permitted under the Delaware General Corporation Law (DGCL).

“This change ensures that outcomes are determined by the stockholders who actively participate in the voting process, rather than by shares that are not voted at all. Under the Company’s current charter, shares that are not voted effectively have the same impact as votes cast against a proposal, which can prevent proposals from passing even when a clear majority of voting stockholders support them,” Plug Power Inc. (NASDAQ:PLUG) said.

A special meeting is set to be held at 10 AM on Thursday, January 29, to vote on both proposals.

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Disclosure: None. This article is originally published at Insider Monkey.