What Happened?
Shares of EV charging solutions provider ChargePoint Holdings (NYSE:CHPT) jumped 5.1% in the morning session after the U.S. federal government restored a $5 billion funding program for electric vehicle (EV) charging infrastructure and streamlined deployment regulations. The funding, part of the National Electric Vehicle Infrastructure (NEVI) Formula Program, had been previously frozen by the Trump Administration but was restored after a federal court ruled the move overrode the will of Congress. U.S. Transportation Secretary Sean Duffy announced the $5 billion program would resume with revised guidance aimed at streamlining applications and giving states more flexibility. This simplification of requirements is expected to accelerate the construction of EV charging stations, with officials suggesting over $2 billion could start flowing to projects as soon as next month. The news provides a significant tailwind for companies in the sector, like ChargePoint, in an industry already showing improved reliability and projected for major growth.
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What Is The Market Telling Us
ChargePoint’s shares are extremely volatile and have had 63 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 16 days ago when the stock dropped 19.7% on the news that the company implemented a 1-for-20 reverse stock split. The strategic decision was intended to increase the market price per share to ensure ChargePoint remained in compliance with the New York Stock Exchange's minimum trading price criteria. However, such moves are often viewed negatively by the market as they do not alter a company's fundamentals and can indicate underlying financial distress. In this case, reports highlighted that the electric vehicle charging provider faced significant challenges, including a concerning cash burn rate and a decline in revenue, which likely fueled the sell-off.
ChargePoint is down 47.9% since the beginning of the year, and at $11.67 per share, it is trading 69.8% below its 52-week high of $38.60 from August 2024. Investors who bought $1,000 worth of ChargePoint’s shares 5 years ago would now be looking at an investment worth $56.37.
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