Blink Charging (BLNK) Stock Falls Amid Bearish Reports

Blink Charging Co. (BLNK) shares fell 30% during Thursday's session amid bearish reports from both short sellers and analysts. The move lower follows a rally from less than $2.00 per share back in June to a high of nearly $15.00 per share in late July.

Key Takeaways

  • Blink Charging Co. stock had rallied from $2 to nearly $15 in just a few months thanks to the popularity of electric vehicle stocks.
  • The stock fell 30% during Thursday's session amid allegations that its charger network is smaller than advertised, while analysts cited a lofty valuation.
  • The stock could see more downside ahead as the relative strength index (RSI) remains moderate but the moving average convergence divergence (MACD) remains in a bearish downtrend.

Culper Research alleged earlier this week that Blink Charging Co. has vastly overestimated the size of its electric vehicle charging network. By the short seller's estimates, the company's functional charging station network consists of just 2,193 stations, which is far less than the 15,000 charging stations that the company claims to operate.

Short selling is an investment or trading strategy that speculates on the decline in a stock or other securities price. It is an advanced strategy that should only be undertaken by experienced traders and investors.

Aside from short sellers, many analysts have become critical of the stock's lofty valuation. Mariner Research said that Blink Charging Co.'s management team and underlying products do not justify trading at 46 times full-year 2020 revenue and assigned a $1.00-per-share base case price target that suggests more than 90% downside from Thursday's opening price.

H.C. Wainwright also downgraded Blink Charging Co. from Buy to Neutral last week, citing the stock's high valuation. Analyst Sameer Joshi believes that the stock price is being driven by heightened interest in the electric vehicle space rather than any near-term financial outlook. The stock's then-$11 price was substantially higher than his $5.00 price target.

Chart showing the share price performance of Blink Charging Co. (BLNK)
TradingView.com

From a technical standpoint, the stock fell near its 50-day moving average at $6.99 during Thursday's session. The RSI continued to moderate to neutral levels with a reading of 41.33, but the MACD remains in a sharp bearish downtrend, suggesting more downside ahead.

Traders should watch for consolidation near the 50-day moving average or a breakdown to retest prior reaction lows of around $5.00 over the coming sessions. If the stock rebounds higher, traders could see a move to retest trendline support at around $10.50. If the stock breaks down from $5.00 levels, traders could see a move toward the 200-day moving average at $3.22.

The Bottom Line

Blink Charging Co. is facing allegations from a short seller that its charger network is smaller than advertised, but even absent those allegations, analysts believe that the stock's valuation is lofty at current levels.

The author holds no position in the stock(s) mentioned except through passively managed index funds.

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