DeZwarteRidder schreef op 20 november 2020 18:05:
Here is where the Plug Power story gets interesting.
Rewind back to 2017 and you see that PLUG’s stock price had fallen to $0.85 in Feb 2017. Faced with a stock price under $1, a deteriorating liquidity situation, and the prospect of being delisted from Nasdaq, PLUG was desperate for a quick fix. In an effort to boost credibility and revenue, the company struck a deal with Amazon that gave Amazon warrants to acquire large chunks of PLUG stock in exchange for purchase orders. The agreement was so generous and favorable to Amazon, that Walmart soon signed up for the same deal. An overview of the agreements can be found starting on page 38 of the 2019 10-K filing.
We believe our report is the only in-depth look at the Amazon and Walmart Transaction Agreements. We believe the revenue from these agreements has fueled the +700% rise in the stock price; however, the nature of these agreements suggests the revenue from these two customers is likely to decline in 2021.
The summary version of the Amazon and Walmart Transaction Agreements is that both companies were given warrants for up to 55.2m shares of PLUG stock in exchange for purchase orders (primarily fuel cells for warehouse forklifts) in $50m increments up to $600m total. Both companies were given warrants for 5.82m shares just for signing the agreement. At today’s stock price, this equates to a payout to Amazon and Walmart of $145m each with no strings attached. Neither party was required to purchase any products upfront, so you can see why each company took a flyer on this deal.