ChargePoint Stock Falls Following Announcement of $232 Stock Raise

Key Takeaways:

• Electric vehicle charging company ChargePoint announced it’s raising $232 million via stock sales.
• Its stock fell quickly following the announcement, closing at a 15.81% loss.
• ChargePoint’s outlook seems morbid as the company struggles to cope with plummeting stock prices and mounting losses.

Electric vehicle charging network operator ChargePoint announced on Wednesday that a group of institutional investors has offered to purchase $175 million worth of new stock. The company has also sold $57 million in at-the-market sales during the current fiscal quarter, totalling $232 million in sales.

The stock (NYSE: CHPT) fell fast and far immediately following the announcement, dropping 14.5% by early afternoon. By the end of the day, the stock had sunk even farther, closing out the trading session at a 15.81% loss.

Needless to say, ChargePoint is falling on hard times. The company’s stock has fallen 59.27% over the past six months, the company continues to experience thinning gross margins, and losses are continuing to pile on.

ChargePoint’s decision to sell now despite its low stock price is an indication that the company is in fairly dire straits and pulling out all the stops to stay afloat.

Rex Jackson, ChargePoint’s CFO, mentioned in a statement that the sale, along with another line of credit, will keep the company afloat until 2025 and framed it as just another step along the path to attaining EBIDTA profitability in the fourth fiscal quarter of the coming year.

ChargePoint will continue offering stock at its at-the-market facility to raise more funds.

What is ChargePoint?

ChargePoint is an electric vehicle charging infrastructure company that operates the largest network of independent EV charging stations. The company was founded in 2007 and is based in the United States but operates in 14 different countries.

The company holds a prominent position in the electric vehicle landscape. Surprisingly, it has seemingly not benefited from growing consumer demand for electric vehicles.

In 2021, ChargePoint IPOed and became the world’s first publicly traded global electric vehicle charging network. Since it was listed on the NYSE, it has been in a downtrend — it was down 52.47% in its first year on the market, 49.97% in its second, and 62.43% so far in its third (and current) year.

Investor outlook

It should come as no surprise by this point that ChargePoint is a risky stock to invest in. It’s been falling since it was listed on the NYSE, and there’s no signs that the trend is turning around.

On a fundamentals level, ChargePoint is not currently profitable, it’s struggling with losses, and its gross margins are getting thinner.

While it’s possible that this is just an opportunity to buy ChargePoint stock at a discount, it doesn’t seem to be shaping up that way. Investors should exercise caution when considering this stock.

The bottom line

ChargePoint announced that it’s planning to sell $232 million in new stock. Investors reacted swiftly and strongly, and ChargePoint stock fell over 15% immediately after the announcement was made.

The outlook for ChargePoint stock doesn’t look good, and investors should keep their wits about them when considering whether to invest or not.