While we’re on the subject of potential bubbles, Blink Charging Co. ($BLNK) is an overhyped electric vehicle (EV) stock that looks like its bubble is popping from attacks from short-sellers like Citron and others. I (very profitably) have disagreed with Citron in the past when I recommended buying Peloton ($PTON) at around $50, but I have to agree with them here.
Blink is an owner, operator, and supplier of commercial and residential EV charging stations.
- They claim to have deployed 6,944 chargers on their Blink Network and 8,772 private, non-networked chargers around the U.S.
Blink is very small and their financials are uncompelling.
- $3.8 million in revenue and $1.1 million in gross profit for the first three quarters of 2020, representing 83.5% revenue growth with a 29% gross margin
- 69% of their revenue comes from selling the actual charging stations, which carries 45% margins
- They only made $570,000 from unprofitable charging revenue during this period
$BLNK stock is insanely overpriced.
- Even after selling off the last two days to $24 per share, that implies a fully-diluted valuation of almost $1 billion.
- Even if Blink keeps growing at this rate, that implies an over 100x forward revenue multiple and an over 350x forward gross profit multiple.
To put that in perspective, even if the stock stays flat and Blink were to keep growing at 85% per year, it would take 6 years for the stock to reach the valuation that Pinterest ($PINS) has.
Furthermore, you could buy ChargePoint ($SBE), which is almost 30x larger with 73% market share for one-third the cost (30x projected 2022 revenue and 90x 2022 gross profit). If $BLNK traded at $SBE’s valuation, it should be worth around $5 per share.
Blink’s has a dubious story, sketchy management, and nefarious corporate management.
- Culper Research’s on-the-ground research estimates Blink’s public network only has 2,192 functioning public chargers, and many of them are in disrepair.
- Citron shows that Blink is not growing in app downloads.
- Culper estimates that Blink’s network is woefully underutilized, with under 3% utilization.
- Culper dug up the fact that Blink’s Chairman and CEO Michael Farkas has been involved in multiple previous criminal schemes.
- BLNK has increased share count by almost 20% in the last year, implying they are aggressively diluting value from shareholders.
Disclaimer: I am short Blink Charging Co. ($BLNK) in small “speculative” size for my personal account.