If corporate insiders are snapping up large amounts of company stock, it’s often worth taking a closer look. Insiders only buy stock for one reason – they expect it to go up.
In this report, we are going to flag some significant insider buying at ChargePoint Holdings Inc (CHPT:US). ChargePoint is an American electric vehicle (EV) infrastructure company that owns a large network of EV charging stations. Currently, it has over 200,000 charging stations across the US and Europe. It is listed on the New York Stock Exchange and has a market cap of around $1.8 billion at present.
Large Stock Purchase
Our data shows that on September 13, board member Bruce Chizen purchased 500,000 CHPT shares at a price of $5.79 per share. This trade cost the insider approximately $2.9 million and increased his holding to 1.247 million shares.
Normally, we would see this insider activity as bullish.
Mr. Chizen has served on ChargePoint’s board since December 2014. So, he is likely to know the company well.
He also has an investment background. Currently, he is a Senior Adviser to Permira Advisers LLP, a private equity fund, and a Venture Partner at Voyager Capital, a venture capital firm.
High Short Interest
Digging deeper into the data, however, there are a few issues that concern us here.
The first is that Linse Capital has been offloading a ton of ChargePoint stock recently. This month, Linse has dumped around $27 million worth of CHPT shares. It’s worth noting that Linse is run by Michael Linse, who has a background in alternative energy investing.
The second is short interest is very high. Our short interest data shows that at present, 125.2 million shares are on loan – roughly 42.1% of the free float. Clearly, a lot of institutions are bearish on ChargePoint.
Given the selling activity from Linse Capital and the high level of short interest, we think investors need to be careful here.
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