Shares of Plug Power (PLUG) plummeted 20.56% in after-hours trading on Tuesday following the company's announcement of a $375 million private offering of convertible senior notes due 2033. The hydrogen fuel cell maker's stock dropped to $1.71, reflecting investors' concerns about potential dilution and the company's financial strategy.

Plug Power intends to use approximately $243 million of the net proceeds to fully repay its outstanding 15% secured debentures and pay related termination fees. The remaining funds will be allocated to repurchase all or a portion of its existing 7% convertible senior notes due 2026 and for general corporate purposes. This refinancing move suggests the company is seeking to restructure its debt and improve its capital structure, but at the cost of potentially diluting existing shareholders.

The sharp decline in Plug Power's stock price indicates that investors are wary of the company's need for additional capital and the terms of the new convertible notes. This offering comes at a time when Plug Power has been focusing on streamlining operations and enhancing cash efficiency through its recently announced Project Quantum Leap initiative. The market reaction suggests that despite these efforts, concerns persist about the company's path to profitability and its ongoing capital requirements in the competitive hydrogen solutions market.