What happened
Blink Charging (BLNK +2.03%) stock has been hammered this week after investors got an unwelcome surprise from the electric vehicle (EV) charging network start-up. Blink shares had started the year bouncing off of recent lows with a sharp 30% gain.
NASDAQ: BLNK
Key Data Points
But that pop has been completely erased this week with the stock down 25% from last Friday's close on the last morning of trading, according to data provided by S&P Global Market Intelligence.
So what
Blink stock had reached about $15 per share on the early 2023 bounce, but management announced this week that it would be offering new shares of common stock at a price of just $12 per share. Not surprisingly, the stock immediately plunged to that level, and then kept going.
Image source: Blink Charging.
Now what
Blink's business is still squarely in growth mode, and it's not surprising that the company would want to raise new capital. The company said the nearly $100 million it is raising from the stock offering will be used "to fund EV charging station deployments, to finance the costs of acquiring or investing in competitive and complementary businesses, products and technologies as a part of its growth strategy."
Shareholders want the company to invest in its growth, but the stock dropped for two reasons on the capital raise news. The low share price compared to where the stock was trading was one reason, of course. But dilution to existing shareholders is also significant. The offering of up to another 9.25 million shares would add nearly 20% to Blink's outstanding share count.
For investors who do believe the company has a bright future as the EV sector grows and the need for charging networks accelerates, this week makes a great opportunity to enter the stock. But for shareholders who had already been along for the ride, this week hasn't been a bright spot on what is sure to be a long journey to profitability.
