I think hydrogen has the potential to be a game-changing fuel source. It could help supply the global economy with the emissions-free fuel it needs to help reach net-zero emissions by 2050. The fuel represents a massive opportunity that could be worth trillions of dollars in the coming years.

Given the immense potential of hydrogen, I've looked into various ways to invest in the emerging fuel source, including Plug Power (NASDAQ: PLUG). However, I haven't invested in Plug Power and will probably never buy shares. Here's the main reason why.

Incinerating cash

Plug Power has been around for a very long time. The company formed in 1997 and went public two years later. Despite being public for a quarter-century, Plug Power has never fully matured into a profitable and growing company.

Through the first six months of this year, Plug Power generated only $145 million in revenue. Instead of growing, its sales have fallen more than 50% over the past year, and its losses continue to pile up. Plug Power posted a net loss of $558 million during the first six months of 2024. That's up from a nearly $443 million net loss across the same period of 2023.

That's just the company's operating losses. Plug Power is digging itself farther into a financial hole by investing heavily in building out its green hydrogen ecosystem. The purchase of property, plant, and equipment totaled another $194 million in the first half of the year. As a result, the company is burning through cash. Its cash balance was down to $1 billion at the end of June, falling from $1.5 billion in June of 2023.

The company has been covering its losses by issuing new shares. Those stock sales have massively increased its outstanding shares:

That has significantly diluted existing investors, which has weighed heavily on the stock price. Plug Power has lost an astounding 98.5% of its value since its IPO.

The losses will continue to pile up

Plug Power is still several years away from turning the corner on profitability. While analysts expect Plug Power's revenue to more than double by 2026 to over $2 billion, they still anticipate it will post a $250 million operating loss that year. That's if everything goes according to plan, which hasn't been the case for Plug Power in the past. It's likely, then, that the company will need to continue issuing more stock to plug the gap between its revenue and losses. Future stock sales could continue to weigh on the share price.