Shares of electric-vehicle charging network Blink Charging (BLNK 3.14%) were down sharply for a second day on Thursday, after an analyst wrote that the company appears to have "vastly exaggerated" the size of its network.
As of 10:45 a.m. EDT, Blink's shares were down 18.9% on the day. They're down about 25% since the analyst's note was released before the market opened on Wednesday.
In a blistering note, Culper Research revealed that it opened a short position in Blink's shares after its analysis suggested that Blink has just 2,200 operational public charging stations -- not the 15,000 that the company has claimed.
Blink operates public electric-vehicle charging stations and sells recharging equipment to commercial and residential customers. This is from its second-quarter 10-Q filing:
As of June 30, 2020, the Company had 15,151 charging stations deployed, of which, 5,385 were Level 2 commercial charging units, 102 were DC Fast Charging EV chargers and 1,193 were residential charging units. Additionally, as of June 30, 2020, the Company had 305 Level 2 commercial charging units on other networks and there were also 8,166 non-networked, residential Blink EV charging stations.
And here's an example of Blink's description of its network.
#EV Charging Location Alert: Renton, WA. A new Blink level 2 charger has been installed at 1850 Maple Valley Highway. Blink's network of over 15,000 chargers gives EV drivers the ability to charge their car wherever they live, work, and play. #EVCharging $BLNK pic.twitter.com/N1WnqXSEgp— Blink Charging (@BlinkCharging) August 17, 2020
Culper's key assertions are that:
- When Blink claims that it has a "network of over 15,000 chargers," as in the tweet shown above, it's counting those 8,166 "residential charging stations" in that total -- and that many or most of those residential stations consist of a charger in someone's private garage. They're not part of the network.
- There are just 3,275 active charging stations shown on Blink's own map.
- Roughly a thousand of those charging stations are "missing, inaccessible, or inoperable."
More broadly, Culper's note argues that Blink is "a scheme designed by Chairman and CEO Michael D. Farkas to pillage minority investors to the benefit of insiders" and that Farkas has a history of involvement in dubious business schemes.
Auto investors who are inclined to dismiss this as a short-seller's ranting should note that, as I write this on Thursday midmorning, Blink has yet to respond to these allegations in public. If Culper is off base, Blink needs to say so -- loudly and quickly.
But if Culper is right -- and if nothing else, it certainly looks like Blink has far fewer than 15,000 stations on its network -- then Blink is in real trouble. Stay tuned.