Plug Power (NASDAQ:PLUG) shares rose more than 1% Wednesday after the company announced the implementation of a new cost-savings initiative.
The new initiative is expected to reduce operating expenses at the company by over $75 million annually going forward.
Reacting to the news, analysts said the move mirrors management's emphasis on cost reduction/cash burn control during the company’s recent annual update in January. PLUG said it was targeting a 70% year-over-year reduction in cash burn during FY24 "as the company
previously stated going concern language in its recent 3Q filing," analysts explained.
"This new expense reduction plan will include measures in operational consolidation and personnel adjustment, along w/add'l minor steps, and the company expects to incur a one-time $15MM charge from the proposal," analysts wrote.
"While the cost savings plan is likely a necessary step to help address near-term liquidity/outspend concerns, we question the impact that it will have on timing for green H2 production facility startups - which remain a critical piece of the equation for PLUG to improve fuel margins," they concluded.