Allego (ALLG) Stock Soars 45% Higher on Short Squeeze Hopes

  • Allego (ALLG) stock began trading on the New York Stock Exchange on March 17.
  • The company operates as an electric vehicle (EV) charging provider.
  • Shares of ALLG stock are up over 40% for the past month.
An image of a white EV plugged in, charging
Source: aanbetta / Shutterstock

Allego (NYSE:ALLG) stock is accelerating higher by more than 45% today on seemingly no company-specific news. As a result, shareholders are speculating that a short squeeze may be in play. ALLG stock began trading on the New York Stock Exchange on March 17 following a special purpose business acquisition (SPAC) deal. Since then, shares have declined by over 40%.

Allego is a Europe-based electric vehicle (EV) charging company. The firm has installed more than 28,000 charging sockets across the continent and provided EV drivers with 1.5 billion-plus kilometers of electric travel. In total, Allego has installed more than 750 fast charging locations throughout Europe.

So, why exactly are shares of ALLG stock trading higher today?

Why Is ALLG Stock Up Today?

On Stocktwits, mentions of the ALLG stock ticker have increased by 200%, with shareholders buzzing about a short squeeze. However, that may not be the case. As of July 29, short interest as a percentage of float tallied in at 0.10%, or 245,110 shares sold short. A short squeeze of 0.10% of shares sold short would hardly move a stock.

Instead, investors may simply be bidding up ALLG stock, driving today’s price appreciation. Allego carries an average daily trading volume of about 125,000 shares. Today, the trading volume is more than 9 million.

During the first quarter, Allego reported revenue of 30.5 million euros ($31.4 million), up 221% year-over-year (YOY). Total charging sessions increased to about 1.6 million as well, up 96% YOY. What’s more, including third-party charging sites, sessions totaled 2.1 million. That’s an increase of 118% YOY.

Profitability also trended higher in Q1. Allego reported operational earnings before interest, taxes, depreciation and amortization (EBITDA) of 1.5 million euros ($1.54 million), compared to a loss of 500,000 euros a year ago.

That in mind, Allego’s latest strong earnings report may be boosting ALLG stock. CEO Matthieu Bonnet said the following about the results:

“Our results demonstrate underlying strong for accessible, clean EV charging as the adoption of EVs increases.”

Finally, Allego’s utilization rate also grew to 7.7% during the period, up from 4.5% last year. In April and May, utilization rates even climbed higher to 9%. The standard utilization rate for the fast charger industry is 20%. After a company builds an EV charging station, “all costs are essentially fixed, so utilization is key to achieving efficiency.” However, rates above 20% demonstrate a need for further capacity or new charging locations.

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On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the Publishing Guidelines.

Eddie Pan specializes in institutional investments and insider activity. He writes for InvestorPlace’s Today’s Market team, which centers on the latest news involving popular stocks.

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