Following the announcement of the price of a 23 million Class A common offering at $5.00 per share, EVgo Inc. (EVGO, Financials) dropped 28.5% to $4.52 on Tuesday. EVgo Holdings, LLC, a subsidiary of LS Power Equity Partners IV, L.P., is selling the shares; EVgo itself is not getting money from the deal.
Less underwriting discounts and expenses; the offering, scheduled for Dec. 18, consists of a 30-day option for underwriters to purchase up to an additional 3.45 million shares at the offered price.
With more than 1,000 locations spread across 40 states, EVgo runs one of the biggest public fast-charging networks in the United States. As demand for electric vehicle charging picks up speed, the firm has progressively extended its alliances with big supermarkets, food chains, and ridesharing providers. But Tuesday's significant stock drop emphasizes investor worries about dilution and the competitive constraints the EV charging industry faces.
As competitors like ChargePoint (CHPT, Financials) and Tesla's (TSLA, Financials) Supercharger network continue to grow, the larger EV infrastructure sector is under examination. BloombergNEF estimates that to match increasing EV usage, worldwide public charging infrastructure needs to expand six-fold by 2030.
