TPGY (NYSE:TPGY) stock is the favorite electric vehicle speculation among Investorplace writers.
TPGY is a special purpose acquisition company (SPAC). It is taking EVBox, a Dutch maker of charging stations, to the NYSE next month. On the close of the deal, EVBox will trade under the symbol EVB.
Like other electric vehicle SPACs, TPGY stock has taken a battering lately. Since the start of 2021, its value has been cut nearly in half. But Investorplace writers aren’t alone in liking this play. Cramer likes it. Even Koch Industries, whose CEO has been funding conservative causes for decades, is an investor.
Why TPGY Stock?
Two things make EVBox different.
First, it’s European. Europe is a more mature market than the U.S. when it comes to electric vehicles. It’s a complex market, so a company that can do business across Europe knows how to deal.
Second, EVBox is more than hardware. It’s software that lets fleet owners or homeowners monitor their vehicles. There’s a cloud-based, subscription software product called Everon, that can get manage both fleets and the grid load. In addition to managing stations and charging, Everon also manages drivers and billing across countries. Everon is powered by Alphabet’s (NASDAQ:GOOGL) Google Cloud.
This means EVBox has multiple revenue streams – hardware, software, and services. The company was founded in 2010 and had estimated 2020 revenue of 70 million Euros. That’s about $85.4 million at the May 11 exchange rate of $1.22 per Euro.
The deal, first announced in December, will deliver $425 million to EVBox, implying a value of $969 million.
What We Think
Even as TPGY stock has been falling, most InvestorPlace writers have been supporting it.
Like other SPACs, TPGY launched at $10/share. The price shot up immediately, to as high as $30 around Christmas, and to $32 in February. While the current price looks like a bargain, you’re still paying a premium to the initial valuation.
In April, our Mark Hake estimated TPGY’s value at $44.61/share. He did this after looking at a new investment presentation estimating 2022 revenue at about $275 million. He likes it much better than Chargepoint (NASDAQ:CHPT), which also came public through a SPAC and I’ve written needs more fast-charging 480 volt stations.
Larry Ramer likes TPGY, given Europe’s incentives for EV makers and disincentives for car makers who don’t cross over. Europe will need 1 million chargers to meet demand by 2025, he writes, and has just 250,000.
Matt McCall likes TPGY at its current “beaten down” price. Chris MacDonald calls it “the EV charging play to know.” David Moadel thinks the stock could explode once the merger is done. Faizan Farooque likes it for both day traders and value investors. Josh Enomoto dissents. He believes electrics will have a tough time in the mass market, that they’re currently too expensive for middle-income consumers. Will Ashworth also questioned the idea of TPGY at $45. But what about at $15?
The Bottom Line
Electric vehicle stocks are all speculative. They flew high early in the year, and now they have been laid low. They’re all at fire sale prices.
Speculating on them now makes better sense than it did. If I were to pick between ChargePoint and EVBox, I go with EVBox, because the software and services mean continuing revenue.
But this is still a speculation. Don’t throw any money at TPGY you’re not prepared to lose. Right now, you’re a lot closer to the bottom of its move than the top. If you’re going to buy, now is the time to do it.
At the time of publication, Dana Blankenhorn directly owned no shares, directly or indirectly, in any company mentioned in this article.
Dana Blankenhorn has been a financial and technology journalist since 1978. He is the author of Technology’s Big Bang: Yesterday, Today and Tomorrow with Moore’s Law, available at the Amazon Kindle store. Write him at danablankenhorn@gmail.com, tweet him at @danablankenhorn, or subscribe to his Substack https://danafblankenhorn.substack.com/.
