What happened
Shares of charging network for electric cars Blink charging (NASDAQ: BLNK) were down sharply for a second day on Thursday, after an analyst wrote that the company had “exaggerated” the size of its network.
As of 10:45 a.m. EDT, Blink’s shares were down 18.9% on the day. They are down about 25% since the analyst’s note was released before the market opened on Wednesday.
So what
In a blistering note, Culper Research revealed that it opened a short position in Blink’s shares after its analysis suggested that Blink had just 2,200 operational public charging stations – not the 15,000 that the company claimed.
Image Source: Blink Charging.
Blink operates public charging stations for electric cars and sells charging equipment to commercial and residential residents. This is from the submission of the second quarter 10-Q:
As of June 30, 2020, the Company had deployed 15,141 charging stations, of which 5,385 were level 2 commercial charging units, 102 were DC Fast Charging EV chargers and 1,193 were residential charging units. In addition, since June 30, 2020, the company had 305 Level 2 commercial charging units on other networks and there were also 8166 non-networked, residential Blink EV charging stations.
And here is an example of Blink’s description of their network.
#EV Alarm charge: Renton, WA. A new Blink Level 2 charger has been installed on Maple Valley Highway 1850. Blink’s network of more than 15,000 chargers gives EV drivers the ability to charge their car wherever they live, work and play. #EVCharging $ BLNK pic.twitter.com/N1WnqXSEgp
– Blink Charging (@BlinkCharging) August 17, 2020
Culper’s main claims are that:
- If Blink claims to have a “network of more than 15,000 chargers”, as in the tweet above, it counts those 8,166 “usual charging stations” in total – and that many, like most of those residential stations, consist of a charger in someone’s private garage. They are not part of the network.
- There are just 3,275 active charging stations on Blink’s own map.
- Roughly a thousand of these charging stations are “missing, inaccessible or unusable.”
More broadly, Culper’s remark states that Blink “has a scheme designed by President and CEO Michael D. Farkas to pile minority investors to the advantage of insiders” and that Farkas has a history of involvement in dubious business schemes.
Well what
Car investors who tend to dismiss this as dismissal of the short seller should keep in mind that, as I write this on Thursday morning, Blink has yet to respond to these allegations in public. If Culper is basic, Blink has to say that – loud and fast.
But if Culper is right – and if nothing else, it certainly seems like Blink has far fewer than 15,000 stations on its network – then Blink is in real trouble. Stay tuned.
