Up 28% In July, Blink Charging Trying to Prove Short Sellers Wrong

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Key Points

• Investors have been turning to small cap stocks over the past few weeks, with the Russell 2000 Index up 11% so far in July.
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Shares of Miami-based EV charging infrastructure company Blink Charging ( Nasdaq: BLNK ) are off 3% today as investors take some profits off the table. So far in July, Blink stock has been up as much as 28%, to a monthly high of $3.75 per share, though today's declines have erased some of those gains. Despite the recent rally, Blink stock is still a far cry from its 52-week high of $7.25 per share.

Meanwhile, Blink stock's gains don't tell the full story, as there are also many traders betting against BLNK shares, as evidenced by 21% of shares outstanding being short. By way of comparison, the average short interest for S&P 500 stocks generally ranges between 1.6% and 2.9% , demonstrating the strength of conviction among BLNK bears.

There are plenty of reasons to be optimistic about Blink Charging. For example, Blink entity Envoy Technologies on July 17 clinched a partnership with a Houston real estate development company for the deployment of EV car-sharing services in the Fort Bend County community. That deal sent Blink stock to its highest level in July so far.

One obvious reason traders might be betting against Blink Charging stock is the competition. Blink operates EV charging stations, which pits it against industry leader Tesla's ( Nasdaq: TSLA ) network of over 2,100 supercharger locations in the U.S. market alone, as of early 2024 . However, Blink management believes the dominance of Tesla's standard will benefit Blink too, owing to the smaller company's Tesla-esque plugs.

Blink Charging also recently won the contract as the official EV charging provider for the state of New York, and achieved record revenue results in Q1.

While there appears to be more reasons to be bullish than bearish on Blink, short-sellers could be responding to the overall dampened consumer demand for EVs, resulting in major automakers like Ford ( NYSE: F ) easing up on their electric vehicle aspirations. Last year, new EV registrations increased by 23%, a far cry from 2022's 52% increase.

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