RE: Amazon in hydrogen6 Jul 2021 08:12
https://www.fool.com/investing/2021/06/26/could-amazon-buy-plug-power/
" An intimate relationship
Back in 2017, Plug Power sold warrants to Amazon, giving it the right to buy up to 23% of the company through warrants. The deal was made in part to encourage Amazon to spend enough money with Plug Power, at least $600 million, in order for the warrants to vest. Plug Power also made a similar deal with Walmart, though most of Walmart's warrants don't appear to have vested yet.
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Last year(2020), those warrants vested and Amazon took control of 55 million shares at an exercise price of roughly $6. Amazon appears to have turned around and sold that stock, as it hasn't reported taking an equity stake in Plug Power as it would have to do according to reporting requirements. Plug Power CEO Andy Marsh told The Wall Street Journal, "It was an extraordinary payday for them."
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It's unclear at what price it sold its shares. Amazon likely netted at least $1 billion in the deal, as Plug Power shares have been trading at around $25 for most of 2021. The tech giant reported an equity warrant valuation gain of $1.5 billion in its other income in 2020, much of which was likely from Plug Power. In Q1 2021, it reported a $305 million gain under the same line item.
For Plug Power, the deal also seems to have worked out, even though it resulted in the company reporting negative revenue last year, as the loss it took on the warrants were greater than its sales. Still, there was no cash impact from the warrants, and the skyrocketing stock price gives the company much more flexibility than it had in 2017 when it made the deals with Amazon and Walmart.
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