Plug Power avoids reverse split as shareholders back stock expansion | Finance

Plug Power shareholders approved a measure allowing the hydrogen firm to double its authorised common stock to three billion shares, removing the immediate need for a reverse stock split.

90% of votes cast supported the board’s proposal to increase authorised shares from around 1.5 billion to three billion. 8.6% opposed the measure, with 0.8% abstaining.

It comes after the company initially failed to pass the measure due to a low voter turnout. Plug had warned that failure to approve could have forced it to pursue a reverse stock split to maintain exchange compliance and preserve financial flexibility.

The expanded share authorisation gives Plug greater capacity to issue equity for capital raises, debt conversions, employee compensation and potential transactions – a key lever as it works to stabilise its balance sheet.

However, the firm did not receive enough votes in favour of another proposal to “modernise” its voting standards.

As a result, Plug’s existing voting standards remain in place. Certain charter amendments still require approval from a majority of all outstanding shares – meaning shares that are not voted effectively count against the proposal.

While Plug has not given any signals to repropose changes to its voting standards, it hopes the passed share proposal will give it more financial flexibility as it looks to shore up its balance sheet.

The vote comes ahead of a leadership transition, with long-serving CEO Andy Marsh set to hand over to Chief Revenue Officer Jose Luis Crespo in March, as the company pushes toward margin neutrality.

The past few years have seen substantial job cuts and efficiency savings across the firm, but profitability continues to elude the 29-year-old company.