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CHPT’s Dreadful Decline: Is This the End of the Charging Giant?

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  • ChargePoint (CHPT) is finally ramping up production of Tesla compatible chargers.
  • However, ChargePoint’s capital raise indicates that the company is in a dire financial situation.
  • Investors shouldn’t touch CHPT stock with a 10-foot pole.
CHPT stock - CHPT’s Dreadful Decline: Is This the End of the Charging Giant?

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It’s hard to admit it when your bullish thesis was wrong. Yet, it’s never too late to bail on a terrible stock. Electric vehicle charging station manufacturer ChargePoint (NYSE:CHPT) proudly touted its latest product ramp-up. Still, CHPT stock gets an “F” rating and will probably continue to lose value.

It’s easy to find red flags for ChargePoint. For example, we’ve discovered reports of ChargePoint insider selling their shares. Maybe some loyal investors will ignore the insider share selling. That’s fine, as we’ve found other reasons to avoid CHPT stock. If you’re already losing money on the stock, this is a good time to consider cutting your losses.

CHPT Stock Dives Despite ChargePoint’s Big Announcement

When a company proudly discloses seemingly positive news but the company’s stock falls anyway, that’s a bad sign. ChargePoint recently provided a textbook example of this principle in a real-life situation.

On the morning of Oct. 19, ChargePoint announced that it’s “rolling out NACS connector support for its AC and DC charging solutions.” Thus, the company is ramping up production of Tesla (NASDAQ:TSLA) compatible NACS EV chargers.

Between that day and the following day, CHPT stock declined 8%, dropping from $3.23 to $2.97. As the old saying goes, the market has spoken.

And, what the market said was, “So, what?” or perhaps, “Too little, too late.” Tesla has had its own charging network for a while now, and major automotive manufacturers have adopted that network.

Some investors undoubtedly hoped that ChargePoint’s press release would mark a turning point for CHPT stock. Yet, that’s not what actually happened and the stock is still on a trajectory toward zero.

ChargePoint’s Capital Raise Irks Investors

In a high-interest-rate environment, the market is less forgiving of unprofitable companies. ChargePoint has been unprofitable for a long time.

ChargePoint CEO Pasquale Romano tried to change the market’s perception of the company’s financial situation. Specifically, Romano declared ChargePoint was “well-positioned and well-capitalized for the future.”

But if ChargePoint is so “well-capitalized,” then why did the company feel the need to raise $232 million by issuing and issuing and selling stock shares?

It’s frustrating that ChargePoint didn’t specify the total number of issued and sold shares in the press release. Thus, it’s difficult to calculate or even estimate the dilutive impact on the current CHPT stock shares.

Additionally, according to a Barron’s report, “Wall Street doesn’t project positive free cash flow until calendar 2025” for ChargePoint. Investors should wonder: How many more times will ChargePoint print and sell more shares to raise capital?

CHPT Stock: It’s Okay to Bail if You’re in a Losing Position

If you’re a longtime ChargePoint investor, you might be holding in hopes of recovering your losses. However, the facts that we’ve uncovered indicate that ChargePoint’s shareholders will probably just continue to lose money.

Frankly, ChargePoint has a credibility issue. The company doesn’t seem to be “well-capitalized” if it’s printing and selling shares to raise money.

As for the announcement of ChargePoint’s Tesla-compatible chargers, the market spoke loudly and clearly. Overall, investors weren’t impressed with ChargePoint’s press release. Therefore, CHPT stock gets an “F” grade and definitely isn’t a recommended stock pick.

On the date of publication, neither Louis Navellier nor the InvestorPlace Research Staff member primarily responsible for this article held (either directly or indirectly) any positions in the securities mentioned in this article.


Article printed from InvestorPlace Media, https://investorplace.com/market360/2023/10/chpts-dreadful-decline-is-this-the-end-of-the-charging-giant/.

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