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Why Blink Charging Stock Popped 14% Ahead of Earnings

By Rich Smith – Aug 12, 2020 at 1:11PM

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New moves promise to improve the Blink membership experience -- and maybe improve the company's earnings, too.

What happened

Blink Charging (BLNK -2.55%), which operates a network of electric vehicle (EV) charging stations, is scheduled to report its Q2 2020 earnings after close of trading on the Nasdaq tomorrow. Investors in Blink don't have to wait for the news to begin enjoying gains today, however -- because Blink shares are already charging ahead nearly 7% in 11:45 a.m. EDT trading (and were up twice that earlier in the day).

What's got traders so hot and bothered over Blink?

Cartoon of a yellow car plugged into an electric charging station

Image source: Getty Images.

So what

In a nutshell, this morning, just one day before earnings, Blink announced that it will make "significant changes to its membership program" and offer "an improved network user experience and completely redesigned website,"

Blink says its website will make it easier for members of its network to find available charging stations and will feature "businesses that currently have or are interested in obtaining an EV charging station at their locations."

Perhaps the most important change, though, is that Blink will now offer "multi-level pricing which allows employers to provide exclusive pricing to employees charging at their Blink IQ 200 chargers." And Blink network members who enroll in its Pro membership option will receive "a prepaid membership option" in exchange for "exclusive member charging rates and discounts on the Blink HQ 100 residential charging station."

Now what

The company didn't say what any of these changes mean for it in terms of dollars and cents. It stands to reason, though, that if Blink is "hosting" businesses on its website, it's not doing that for free, suggesting there's an advertising revenue option being explored. The discussion of pricing changes, too, suggests an opportunity to extract more revenue from its customers -- just as the offer to let customers prepay for Blink's services suggests the company may be hoping to get itself a bit of a "free float" -- customer cash that it gets to collect interest on until it's drawn down.

All of these moves, therefore, promise the potential to plump up Blink's revenues and profits. Will it be enough to justify a 7% stock move -- or a 14% one? Maybe the company will shed a bit more light on that point when it reports earnings tomorrow.

Rich Smith has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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