Of all the stocks that have gotten off to bad starts in 2024, Plug Power (NASDAQ:PLUG) stands out. This company operates in the hydrogen fuel-cell energy space. It’s not as if the clean energy market is bad but, right now, the financial landscape for PLUG stock looks questionable at best.
Indeed, shares of PLUG have fallen almost 50% over the past one month. Most recently, the company announced a new $1 billion new stock offering, which certainly hasn’t helped matters. For the investors who suggested that PLUG stock might be primed for a short squeeze, though, they might have been on to something. There are currently no shares of PLUG stock available to short, according to Fintel’s sample of a leading prime brokerage.
Does this mean that a Plug Power short squeeze is coming? Let’s take a closer look.
Is a PLUG Stock Short Squeeze Coming?
As noted, PLUG stock isn’t experiencing a short squeeze yet. Rather the opposite, in fact. As of this writing, shares are down more than 10% for the day amid significant volatility. The stock’s current trajectory doesn’t suggest that a turnaround is likely anytime soon, either. Given that PLUG stock has fallen more than 40% in just the past five days, though, this performance isn’t surprising, especially after the new stock offering news.
Data from Fintel shows that, as of a few hours ago, there are zero shares of PLUG stock available to short based on a sample of a leading prime brokerage. That’s down from 80,000 shares earlier today. PLUG stock currently boasts a high short interest, with almost 30% of its shares being sold short. Additionally, short sellers have only 3.62 days to cover their positions. This indicates that it wouldn’t take much buying pressure for a short squeeze to start.
Given how poorly PLUG stock has performed lately, a squeeze is certainly possible. Indeed, InvestorPlace contributor Shane Neagle pegged Plug Power as a likely short squeeze candidate earlier this month:
“Shares lost nearly two third of its value in 2023 after the company issued a going-concern warning, which is a note or disclosure in a company’s financial statements that raises doubts about the firm’s ability to continue its operations in the foreseeable future.”
In the recent past, though, there have been other reports of no shares available to short for unstable stocks that have still ultimately proven unable to squeeze higher. We’ve seen this phenomenon play out with WeWork (OTCMKTS:WEWKQ) and, before that, with Mullen Automotive (NASDAQ:MULN). Neither company experienced the squeeze that some retail traders had hoped for. Now, nothing in Plug Power’s price action so far suggests that a surge is coming, either. This could just be the beginning of the end for the struggling company.
On the date of publication, Samuel O’Brient 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.
