EVgo shares tumble on weak pricing of secondary offering

Investing.com -- Shares of EVgo (NASDAQ:EVGO) fell sharply in premarket trading today, down nearly 20%, after the electric-vehicle charging company priced a secondary offering at a significant discount. The Los Angeles-based firm announced that an affiliate of LS Power Equity Partners sold 23 million shares at $5 each, which is 20.9% below the stock's last closing price.

The offering's price reduction reflects a strategic move by the major shareholder, which previously held a 66.5% stake with 195.8 million shares, according to a Securities and Exchange Commission filing. The lead bookrunners for the offering include prominent financial institutions such as JP Morgan, Goldman Sachs, Morgan Stanley (NYSE:MS ), and Evercore.

This stock movement comes on the heels of EVgo closing a $1.25 billion guaranteed loan facility from the U.S. Department of Energy on Thursday, initially announced in early October. The loan aims to support the expansion of public EV-charging infrastructure across the United States. Since the loan announcement on October 2, EVgo's (NASDAQ:EVGO ) stock had seen a substantial increase, gaining approximately 61% through Monday.

In 2024, EVgo's stock has experienced significant volatility, trading as low as $1.65 on April 25 and reaching a peak of $9.07 on October 25. Today's pricing adjustment in the secondary offering appears to be a contributing factor to the current downward trend in the company's stock price.

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Source: Investing.com