What happened
Shares of ChargePoint Holdings (CHPT -2.33%) sank 31.9% in July, according to data from S&P Global Market Intelligence. The stock pulled back amid a new secondary share offering and market pressure hitting speculative and growth-dependent technology stocks.
Concerns related to inflation and the COVID-19 pandemic prompted volatility for many growth-dependent stocks last month, and market trends dragged some electric vehicle (EV) and charging players lower in the period. ChargePoint Holdings' announcement and completion of a secondary share offering also appears to have spooked investors.
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So what
ChargePoint Holdings announced on July 14 that its underwritten secondary public offering of 12 million shares by certain stockholders would be priced at $23.50 per share. ChargePoint Holdings Stock started July's trading priced at $35.17 per share, and the share offering being carried out at a price significantly below preceding levels appears to have spurred more sell-offs. The stock offering closed on July 19.
ChargePoint also published a press release on July 20 announcing that it had entered into a deal to acquire has-to-be, a leading European electronic mobility company that operates a proprietary charging software platform. The cash-and-stock deal is expected to be valued at approximately 250 million euros and to close this year after going through regulatory approvals and other customary closing processes. However, it's not clear that the acquisition news had a substantial impact on ChargePoint's stock performance last month.
Now what
ChargePoint Holdings stock has regained some ground early in August trading. The company's share price is up roughly 4.1% in the month so far.
The EV and charging-technologies markets will likely see strong growth through the next decade and beyond, but each of these industries is also seeing a rush of new competitors. ChargePoint is off to a strong start in its technology and service categories, and moves such as its recent acquisition of has-to-be may help the company shore up a long-term position in these burgeoning industries. However, investors should keep in mind that the overall EV and charging-technologies markets are still pretty young in the scheme of things, and it's difficult to map out how they'll progress and which companies are likely to emerge as lasting winners.
ChargePoint Holdings has a market capitalization of roughly $7.9 billion and is valued at approximately 38.7 times this year's expected sales.
