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Why Blink Charging Shares Tumbled This Week

Motley Fool - Fri Aug 25, 1:10PM CDT

What happened

Blink Charging(NASDAQ: BLNK) had two big press releases this week, and they both are going to help the business grow. But investors aren't buying. In fact, Blink shares have plunged this week, down about 13.4% as of early Friday afternoon, according to data provided by S&P Global Market Intelligence.

So what

The electric vehicle (EV) charging-equipment company announced a new two-year contract with the Tennessee Valley Authority (TVA) yesterday. Blink will supply EV charging equipment, including Level 2 and DC fast chargers for both public and commercial fleet applications.

Earlier in the week, blink also announced an agreement with Arcos Dorados, a company that operates and franchises McDonald's restaurants in Latin America and the Caribbean. The largest McDonald's franchisee in the world will use Blink's EV charging solutions for five McDonald's restaurants it owns in Puerto Rico.

But there's another elephant in the room that EV charging-network investors are watching and that likely has contributed to Blink's shares hitting a 3-year low this week.

Now what

EV leader Tesla has been signing deals with a growing number of EV makers to open up its supercharging network to non-Tesla vehicles. Now stock analysts are starting to put a valuation on that portion of its business, and investors are likely thinking that will be business taken from other EV charging-network companies.

Wedbush analyst Dan Ives looked at the potential for Tesla's Supercharger network and told clients he believes it will represent as much as $10 billion to $20 billion in revenue by 2030. That would be a lot of potentially lost business especially considering that Blink expects 2023 revenue of between $110 million and $120 million.

Blink Charging is also not yet profitable and doesn't expect to be until at least the end of next year. That has some speculative EV investors moving investments elsewhere this week.

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Howard Smith has positions in Tesla. The Motley Fool has positions in and recommends Tesla. The Motley Fool has a disclosure policy.

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