Hydrogenics issued the following press release this morning:

Hydrogenics Announces Share Consolidation

Press Release Source: Hydrogenics Corporation On Monday February 8, 2010, 6:00 am EST

MISSISSAUGA, Ontario, Feb. 8, 2010 (GLOBE NEWSWIRE) -- Hydrogenics . . . today announced that it will implement a share consolidation of its issued and outstanding common shares in order to comply with the Minimum Bid Price Rule of the Nasdaq Global Market ("NASDAQ"). The consolidation will be effective as of March 12, 2010, and will be implemented with a ratio of one post-consolidation share for every 25 pre-consolidation shares.

"With an interest in preserving the liquidity for our investors that is offered by the NASDAQ Global Market, we wanted to take this step now to ensure continued participation on this highly visible, prestigious exchange," said Daryl Wilson, Hydrogenics President and CEO. "The share consolidation will also provide the means for a broader base of institutional investors – specifically, those with minimum price criteria – to consider taking a position in the company."

Subject to regulatory approval, Hydrogenics' common shares, listed on the NASDAQ and the Toronto Stock Exchange ("TSX"), will begin trading on a consolidated basis when the NASDAQ and TSX open on March 12, 2010. The consolidation will reduce the number of shares outstanding from approximately 105,049,666 to approximately 4,201,987.

Registered shareholders of Hydrogenics will receive instructions by mail on how to obtain a new share certificate representing their consolidated common shares. No fractional shares will be issued as a result of the consolidation. If the consolidation results in a registered shareholder having a fractional interest of less than a whole share, such fractional interest will be rounded down to the nearest whole number. Hydrogenics shares held through a broker, bank, trust company, nominee or other financial intermediary will be adjusted by that firm. [company description and disclaimer omitted]

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"Share consolidation" is a nice way of saying "reverse split", a sign of corporate desperation that in H2FC's experience invariably results in a sharp and permanent reduction in market cap.

The best thing for the people running Hydrogenics to do would be to stop funding all activity not directly related to trying to sell electrolyzers in industrial markets (as opposed to energy markets). That would mean killing the company's fuel cell efforts once and for all and ceasing all spending on R&D and demonstration projects related to hydrogen as an energy storage medium or transportation fuel. (And while they're at it they might as well change the name of the company to Stuart Energy).

If the board of directors did this the company would have a chance of survival as an industrial gas equipment company (although H2FC would still see no reason to want to own HYGS stock). If they don't do this and keep wasting money and good will on the "hydrogen economy" fantasy, the cash burn and dilution will only continue and the company will eventually fold.

HYGS traded as low as 0.242 this morning, down 28% from Friday's close.

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