January 22, 2014

Plug Power reveals new largest shareholder

By: Adam Sichko

Source: The Business Review

With one purchase, a private-equity firm in San Francisco grabbed more shares of Plug Power Inc. (Nasdaq: PLUG) than any other investor in the fuel-cell company.

The stock buy generated $28 million of capital for Plug, which is one of the few remaining public companies headquartered in New York's Capital Region.

The buyer was Heights Capital Management Inc., which now holds close to 10 percent of Plug Power's stock. Plug had offered 10 million shares of its common stock, plus warrants to buy an additional 4 million.

In new regulatory filings, Heights Capital says it's not investing to take an activist stance.

That is a contrast to Plug's previous largest shareholder, Boston-based Interinvest. As recently as last year, chairman and chief investment officer Hans Black had encouraged shareholders to vote out Plug's board of directors for what he described as a "clear and uncalled-for destruction of shareholder value."

One year ago, Interinvest held 17 percent of Plug's stock. Today, its share is less than half that size.

Plug Power makes power systems for forklifts by combining lithium-ion batteries with hydrogen fuel cells. The company has 150 employees.

It is the first real product line for Plug in its roller-coaster existence. Stock soared to $150 a share in 2000, but promptly crashed with the burst of the dot-com bubble and fading craze over the potential for fuel cells.

The share price sank as low as 12 cents early last year, and Plug warned it was nearly out of money.

Plug has been on a rebound of late, buoyed in part by a fairly recent investment from a partner company in Europe. The company booked $32 million in orders in the fourth quarter last year, a record.

I was unable to obtain comment from anyone at Heights Capital, or its Philadelphia-based parent, Susquehanna International Group.

Heights Capital usually invests in health care or tech companies. The focus is "pipe," or private investments in public equity. That means Heights Capital buys discounted stock from companies that need capital.

Plug Power CEO Andy Marsh says the new cash will solidify operations.

"We're on a very clear, fast, steady path now, and we have been able to convince more investors of that," Marsh tells me.

"I now have $46 million in the bank," Marsh says, including the capital supplied by the sale of stock to Heights Capital. "We have an air of confidence at a different level than it's ever been before."