A consolidated class action securities lawsuit has been launched against US green hydrogen technology firm Plug Power, as well as CEO Andrew Marsh and CFO Paul Middleton. The lawsuit alleges false and misleading statements to investors, as well as insider trading.

Plug Power is alleged to have carried out “a long-running scheme to misclassify the cost of liquid hydrogen delivered to customers” in an effort to inflate the company’s perceived profitability, according to law firm Schubert Jonckheer & Kolbe.

Although Plug Power had restated prior-period financial statements from 2018-20 to address the misclassification, in addition to disclosing a material weakness in internal controls and improper accounting practices dated back to 2016, Schubert Jonckheer & Kolbe note that Marsh and Middleton sold around $45mn in their personal holdings of the company’s stock shortly before the restatements. Several other Plug Power insiders—including at least six directors and the company’s general counsel and COO—also sold stock in this period.

“We believe we have the team, technology, focus and vision to become the category king in the $10tn hydrogen economy” Plug Power

Plug Power’s secondary offerings in November 2020 and February 2021 have also been called into question. The company secured $3bn of additional capital “on the basis of these allegedly false and misleading statements” through these offerings, argue Schubert Jonckheer & Kolbe.

Plug Power had not replied to requests for a statement in response to the allegations at the time of writing.

Category king

Plug Power reported $151.3mn in revenue for Q2 2022. Gross margins for the quarter were -21pc, up 4pc month on month and 11pc year-on-year. And the company reaffirmed its 2022 revenue target of $900-925mn.

“We believe we have the team, technology, focus and vision to become the category king in the $10tn hydrogen economy,” it said in its second-quarter earnings letter to investors.

The firm signed an agreement earlier this month with French green hydrogen firm Lhyfe to supply ten 5MW electrolysers. And last month it signed a deal with Amazon to supply 11,000t/yr of green hydrogen from 2025, which it claimed would help it reach its revenue target of $3bn by that same year.

Marsh also claimed that the passing of the Inflation Reduction Act—which includes a $3/kg ten-year production tax credit for any green hydrogen facility that begins construction before 2033—means that green hydrogen will be competitive with grey hydrogen in every industrial sector.

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Author: Polly Martin