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Why EVgo Stock Crashed 27% Today
EVGOEVgo (EVGO) The Motley Fool·2024-12-17 16:49

Core Viewpoint - EVgo's stock price dropped 27% following the announcement of a secondary offering of at least 23 million shares by EVgo Holdings, LLC, at a price of 5pershare,whichissignificantlylowerthanthepreviousclosingprice[1][4].CompanySummary−EVgoHoldings,LLCisanaffiliateofLSPowerEquityPartnersIV,L.P.,andisdistinctfromEVgoitself[2][3].−Theinsidersaleinvolvesasignificantshareholder,whoownsapproximately255 per share, which is significantly lower than the previous closing price [1][4]. Company Summary - EVgo Holdings, LLC is an affiliate of LS Power Equity Partners IV, L.P., and is distinct from EVgo itself [2][3]. - The insider sale involves a significant shareholder, who owns approximately 25% of EVgo's outstanding shares, selling shares at a 21% discount to the last closing price [4][5]. - The proceeds from this sale, estimated between 115 million and $132 million before fees, will not benefit EVgo directly [3][4]. Industry Context - The market reaction indicates a lack of confidence among investors, as the sale suggests that a major shareholder is exiting the investment at a discount, raising concerns about the company's future profitability [5][6]. - Analysts predict that EVgo may continue to operate at a loss for the next decade, further complicating the investment outlook for the company [5].