🔒FuelCell Energy, facing possible Nasdaq delisting, announces plans for reverse stock split 

Danbury-based FuelCell Energy Inc. announced a reverse stock split Tuesday as the company faces delisting from the Nasdaq stock exchange due to its stock price falling below $1.

The company, which produces hydrogen fuel cells that generate electricity and release hot water as a byproduct, notified shareholders of the potential delisting on June 6.

FuelCell has until the end of November to get its stock price above $1 to prevent delisting. FuelCell plans to hold a special stockholder meeting on Oct. 31 to consider and vote on the proposed reverse stock split.

Jeffrey Osborne, managing director at TD Cowen and an analyst who covers FuelCell, said that while reverse stock splits tend to be viewed negatively, he believes it will allow the company to regain Nasdaq compliance.

“Generally reverse stock splits are viewed negatively by investors as it is a sign of a fundamental weakness at any company needing to undertake them,” Osborne said. “Historically special shareholding meetings, which they have called, approve the reverse split proposed, so I do not see an issue in regaining compliance by November.”

“These statements are true for any company going through this process, not just FuelCell Energy,” he added.

Reverse stock splits are done to increase a share price by consolidating the number of existing shares of stock into fewer shares.

FuelCell issued the following statement Tuesday on the reverse stock split:

“The primary reason for pursuing a reverse split would be to increase FuelCell Energy's share price to comply with the minimum bid price required by the NASDAQ Global Select Market. A higher share price can also make the stock more attractive to a broader range of investors, especially institutional investors who often have minimum price thresholds for investments. FuelCell Energy continues to advance its strategy and commercialization efforts, navigating the challenges that emerged for our sector over the past year of slower federal clean energy incentive policy deployment and an elevated interest rate environment.”

FuelCell’s stock was trading at below 50 cents Tuesday morning. The last time the company’s stock traded above $1 was April 18. Its highest stock price over the last year was $1.84. 

FuelCell in June reported that it lost $37.7 million in the second quarter of 2024, compared to a $33.9 million loss in the year-ago period. 

The company’s cash balance was $313.2 million as of April 30, compared to $403.3 million as of October 31, 2023.

This isn't the first time FuelCell has faced delisting. In late 2012, FuelCell’s stock price dipped below $1, but by January 2013 it was able to boost its stock price above the minimum threshold.

Last November, FuelCell celebrated the opening of a 14 megawatt fuel cell park in Derby, the second largest in North America. It also operates the largest fuel cell park in North America, located in Bridgeport.

In April, FuelCell closed on a project debt-financing transaction with Liberty Bank and Connecticut Green Bank for another fuel cell project in Derby. The net funding to the company totaled about $11.6 million. 

Last year, UConn’s Board of Trustees approved spending $21.5 million for new fuel cells on campus that will generate electrical and thermal energy, including $6.5 million for FuelCell to install a hydrogen fuel cell for the Innovation Partnership Building in Storrs.

Fuel cell companies are known as “serial capital raisers” as they develop and commercialize competitive technologies in a fast-moving industry.

In May 2023, FuelCell said it secured $87 million in financing to diversify its capital base, repay existing debt and accelerate commercialization of its hydrogen fuel cell technologies.