Here are some more things in the auto industry and EV market that don’t follow the rules, like strange prices, funny gas prices, and strange things. Wall Street concluded that Shell’s purchase of charging company Volta for $169 million would hurt the market for EV chargers. So, why, or more specifically, did the market wipe out EV charger companies on Thursday before giving them a chance to get back on their feet on Friday slowly? What? A company that makes oil wants to buy a company that makes chargers for electric cars It might seem strange or even backward for an oil and gas company to want to buy a business that charges electric vehicles (EVs). Shell’s primary source of income is from fossil fuels, so why would it support a project that could hurt that income? On the other hand, these companies will take advantage of every chance to get new customers and keep the ones they already have. Since EVs have become popular, this has become a trend, so Shell is one of many oil and gas companies to do it. No matter what a fan of “dinosaur squeezing” tells you, your local gas station and the jobs that go with it aren’t going anywhere soon. A report by Reuters claims that Shell is purchasing Volta, Inc. for pennies on the dollar. Shell USA, Inc., a branch of Shell that is buying Volta, will buy all outstanding shares of Volta common stock for $0.86 per share, or a total of $169 million, in an all-cash deal. When this was written, a Powerball jackpot winner could use that amount to buy the shares. Wall Street was surprised by the low estimate, which put the price of Volta at less than 9% of what it was 17 months earlier. The End of Wall Street You might think that only Volta and Shell would be affected by this news, but Wall Street is more complex. The Volta news caused the stock prices of EVgo, ChargePoint, Blink, Wallbox, and even Shell itself to drop right away. Plug Power, which hurt the most, is still trying to get back on its feet. Its shares started trading on NASDAQ on January 18 at $17.84, but by the time markets opened on Thursday, January 19, they were as low as $15.18. Even though it had just started going up, Plug Power’s stock had dropped 3.40% in the last five days. Silicon Valley Business Journal says that shares of ChargePoint, EVGO and Blink Charging all fell more than 10% on the New York Stock Exchange. (you need a subscription to read it). Only Volta went up, going from $0.60 per share to $0.91 per share, an increase of 45 percent, and is now trading at $0.88. So why did the market for charging EVs suffer instead of just two competitors? According to the same Silicon Valley Business Journal article, most EV charging businesses still need to make money. The valuation of Volta was a stark reminder of this. This is nothing new, as shown by the fact that ChargePoint’s stock price has dropped by 25% in the past year. At the end of trading on Thursday, the cost of EVgo was only a third of what it was when it first went public in 2021. After Thursday’s shock, the market is getting better. When they wrote this article, ChargePoint was back up to $10.96. EVgo was back up to $5.34 per share, and Shell was back up to $58.74 after starting the day lower than it ended Thursday. Even if more acquisitions happen, Wall Street will only be interested in charging providers for a while, at least not until charging EVs becomes more profitable or necessary as more EVs hit the road.
