Stock Slides 5% in One Day Despite Ending Walmart Warrant

Plug Power Inc. | Investor Relations In U.S. markets, hydrogen fuel cell company Plug Power Inc. (PLUG) closed at $2.28 on January 6, down 5.02% from the previous day. After rising about 1% in premarket trading on news of a new license agreement with Walmart and the termination of its warrant overhang, the stock reversed sharply into selling pressure during the regular session. Trading volume exceeded 61.15 million shares—well above the recent average—indicating the price drop was accompanied by substantial selling.

One Dilution Bomb Removed, But a Bigger Capital Raise Looms

The short-term catalyst was the removal of the warrant embedded in the 2017 agreement with Walmart. Under a new Release Event License Agreement, Plug Power:

  • Granted Walmart a limited license to use its GenKey logistics system.
  • Fully terminated up to 55.28 million potential warrant shares (including 34.55 million already vested and 42.19 million scheduled to vest).
Stock Market While this eliminated a major dilution risk that investors had feared for years, the focus swiftly shifted to a larger issue. At a special shareholders’ meeting on January 29, Plug Power plans to propose doubling its authorized common shares from 1.5 billion to 3 billion. The company emphasized in its proxy statement that this measure is “essential” to meet contractual obligations due by February 28 and to raise operating capital. If shareholders reject the proposal, Plug Power even said it might consider a reverse stock split—effectively confessing its ongoing need for fresh funds.

Signaling a Change with Walmart: Partnership Remains, Equity Ties Cut

The deal also signals a shift in the strategic partnership. Walmart will retain the right to maintain and service its own facilities using GenKey materials held in escrow, but only upon a defined “Release Event.” By relinquishing all equity-convertible warrants, Walmart preserves the customer relationship while ending its shareholder involvement. This move simplifies Plug Power’s shareholder base and may make it easier to attract new investors.

Hydrogen Dream vs. Capital Reality at a $3.17 Billion Valuation

At the January 6 close, Plug Power’s market capitalization stood at approximately $3.17 billion, wiping out about $150 million in value in one day. Despite securing successive commercial contracts and enjoying policy tailwinds for its fuel cells and electrolyzers, the company’s large operating losses and reliance on frequent capital raises continue to weigh on its share price. While the end of the Walmart warrant removes a short-term “dilution bomb,” shareholders now face a bigger challenge at month-end: voting on more authorized shares and preparing for a major capital raise or reverse split.