Following the summer of electric vehicles, the charging companies that support them are looking for some time in the spotlight. Blink Charging (NASDAQ:BLNK) got a start yesterday, and shares continue climbing today. BLNK stock closed Tuesday out higher by 9.3% and is up another 5% pre-market Wednesday.
As its name implies, Blink Charging is a company behind all sorts of electric car chargers. Importantly, it is one of the only publicly traded pure plays in this niche. Why does that matter? When the trend heats up, Blink Charging and BLNK stock really benefit.
Yesterday, things started to heat up in a big way for Blink Charging. It all started last week, when California Gov. Gavin Newsom released an executive order. He wrote that, by 2035, California should halt in-state sales of gas-powered cars.
Unsurprisingly, this is a huge boost to electric car enthusiasts. Sure, we know that consumers are increasingly making more eco-friendly decisions and embracing EVs. However, having such a state-wide goal should certainly shake things up.
Bank of America analyst John Murphy agrees. He wrote in note yesterday that although Newsom is setting a goal as opposed to issuing a mandate, his words will still have an impact on auto manufacturing and sales in California. This reality is why the analyst thinks 50% of all new models made in the next four years will rely on alternative fuel. Blink Charging will rise to power those new cars.
BLNK Stock Rises on BAC Analyst Note
Why is the note from Murphy having such a profound effect? It seems that, beyond the broad appeal of companies in the electric vehicle space, investors are looking for a reason to support BLNK stock.
Simply put, the company has a lot to prove. But if it works out, investors know they could benefit from its picks-and-shovels take on the hot EV industry. Blink Charging is currently unprofitable, and there is another big weight on its shoulders. At the end of August, two short-sellers released condemnations of BLNK stock. The bottom line? Blink is exaggerating the size of its charging network.
To be fair, Blink came right out to deny those accusations. Shares quickly turned around, likely as investors try to calm their nerves. No one wants to miss this chance to profit from the boom in electric vehicles that is underway. However, Blink will soon face stock market competition from ChargePoint, making its next moves even more important.
As the price action yesterday and today shows, any proof that the company can shore up its business will go a long way. Newsom’s push to electrify California would be a huge step.
On the date of publication, Sarah Smith did not have (either directly or indirectly) any positions in the securities mentioned in this article.
Sarah Smith is a Web Content Producer for InvestorPlace.com.