What happened
Shares of Switchback Energy Acquisition (SBE) were trading sharply higher again on Tuesday afternoon. The special-purpose acquisition company that plans to merge with electric-vehicle charging network ChargePoint, appeared to be benefiting from strong investor interest after a prominent short-seller attacked a ChargePoint rival.
As of 2 p.m. EST, Switchback's shares were up about 9.2% from Monday's closing price, and up about 42% since the end of last week.
So what
In a series of tweets, Citron Research, a widely followed short-selling firm, hit ChargePoint rival Blink Charging (BLNK -4.17%) with a scathing critique during the trading day on Monday.
Calling it a "total scheme," Citron said that Blink has no real revenue, has no money for research and development, and "should trade right back to $10."
New most ridiculous EV stock is $BLNK. No $$for R&D, management accused of securities fraud, no real revenues. Expect a massively diluted deal soon so management can continue to deceive public. This should trade right back to $10 where it is still overpriced. Total scheme
— Citron Research (@CitronResearch) November 23, 2020
Not surprisingly, Blink's stock was down on Tuesday morning. As for Switchback, Citron's two follow-up tweets help explain why it's having a much better day.
For all $BLNK investors who are naïve, for same mkt cap of $BLNK you can buy ChargePoint $SBE with 73% market share, considering mkt penetration $BLNK should be at $1 per share. Consider $SBE spent $70mil on RD and $BLNK $0 pic.twitter.com/nfXGj42Iq1
— Citron Research (@CitronResearch) November 23, 2020
$BLNK has made no progress expanding downloads or network in years. A total commodity product with no brand. It is an insult to other EV makers to even mention $BLNK as an EV stock, lowest form of shareholder base. This is a $1 bil joke. pic.twitter.com/x4H6CVjSeF
— Citron Research (@CitronResearch) November 23, 2020
Long story short, it seems reasonable to conclude that quite a few investors are selling Blink's shares and buying Switchback's.
Image source: ChargePoint.
Now what
For auto investors who believe that a transition to electric vehicles is inevitable (I do), recharging networks are compelling investments. ChargePoint, with its leading position in the U.S. and a growing presence in Europe, seems like a no-brainer to grow nicely along with EV adoption over the next several years.
If you liked Blink Charging, but are now having second thoughts, Switchback seems worth a close look -- and it seems that many investors are thinking along the same lines today.
