Sunday, February 25, 2024
Dividend Stocks

PLUG Stock Continues to Squeeze Higher Ahead of Business Update Call

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Shares of Plug Power (NASDAQ:PLUG) stock are now up by about 25% compared to the low on Jan. 17. On that day, the hydrogen fuel cell company announced a $1 billion at-the-market (ATM) offering. In November, Plug warned that it would need to raise capital and also issued a going concern warning.

Tomorrow will be an interesting day for PLUG stock investors, as Plug will host a business update conference call before the market opens. CEO Andy Marsh and CFO Paul Middleton will provide the update and also answer any questions. Details of the call remain undisclosed. However, shareholders are eagerly awaiting positive news to recover from PLUG’s dip this year.

PLUG Stock: Plug to Provide Business Update Tomorrow Amid High Short Interest

The rise in PLUG following the $1 billion offering could be attributed to a short squeeze. Pending the possibility of good news tomorrow, PLUG could go even higher.

As of Dec. 31, 161.50 million shares of PLUG were sold short with a combined value of $726.75 million. That’s equivalent to a short interest as a percentage of float of 29.9%. Generally, a short interest of 10% is considered high, while a short interest of 20% or greater is considered very high. At the same time, short interest data is presented with a lag. Given the large decline in PLUG this year, short interest is likely lower today.

In addition, Fintel notes that there are currently only 4,000 shares of PLUG to short, although this data comes with a caveat. Fintel’s shares available to short figure is not representative of the entire market but rather just those available at a leading prime brokerage. “It is a small sample, and it is useful for tracking the rise and fall in demand for shares throughout the day and weeks. It should not be treated as an absolute number of shares that are available to short in the market,” writes Fintel. Investors can still use this figure as a proxy for the number of total shares available to short.

Lastly, Plug’s cost to borrow (CTB) fee has risen to 6.21% compared to 2.89% on Jan. 17. A rising fee indicates increased short seller demand, while a falling fee signals reduced short seller demand.

On the date of publication, Eddie Pan 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

Eddie Pan specializes in institutional investments and insider activity. He writes for InvestorPlace’s Today’s Market team, which centers on the latest news involving popular stocks.

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