Short interest data can be a valuable risk management tool. Research shows that short sellers are skilled at identifying risks. If they’re shorting a stock, there’s usually a good reason they are doing so.
In this report, we are going to look at the short interest data on Blink Charging Co (BNLK:US). Blink Charging is a US company that designs, manufactures, owns, and operates EV charging stations. It’s listed on the Nasdaq and currently has a market cap of $690.23 million.
Blink Charging Short Interest
Our data shows that hedge funds are aggressively shorting Blink Charging stock at present. Currently, 18.45 million BLNK shares are on loan, which represents approximately 45.35% of the free float. Utilization (a measure of short seller demand) is 100% while the cost to borrow stock is 22.47%.
What’s interesting is that the number of shares on loan has risen steadily over the last three months. In mid-October, the figure was around 14.5 million. Today, however, it is around 26% higher. This tells us that the stock has been attracting more attention from the short seller community recently.
Why Are Hedge Funds Targeting Blink Charging?
As for why the short sellers are targeting Blink Charging Co, it could be related to the company’s widening losses. In 2021, the company posted a net loss of $55.1 million. For 2022 and 2023, however, the company is expected to post net losses of $89.7 million and $92 million respectively. In the current environment, sentiment towards early-stage companies with ballooning losses is very weak.
It could also be related to the company’s cash position. As of September 30, 2022, Blink Charging Co only had cash and cash equivalents of $57.0 million on its books. That cash pile is not going to last very long. In the last quarter, operating expenses totalled $29.3 million. So, the company may need to raise capital soon (and conditions for raising capital are challenging right now).
Alternatively, it could be related to the company’s valuation. For 2022, analysts expect revenue to come in at $58.2 million. That puts the stock on a price-to-sales ratio of around 11.9 at present, which is relatively high.
Whatever it is the short sellers are focusing on here, we think caution is warranted towards the stock in the near term. Generally speaking, it is not a good idea to bet against the short sellers.