EVgo Shares Plunge Due to Underpricing in Secondary Offering

Investing.com -- Shares of electric vehicle charging company EVgo (NASDAQ:EVGO) fell approximately 20% in pre-market trading today after the company priced its secondary public offering at a significant discount. The Los Angeles-based firm announced that a subsidiary of LS Power Equity Partners sold 23 million shares at a price of $5. This price is 20.9% below the stock's last closing price.

The decline in the offering price is seen as a strategic move by a major shareholder, who had a 66.5% stake with 195.8 million shares, according to a previous filing with the Securities and Exchange Commission. Lead underwriters for the offering include prominent financial institutions such as JP Morgan, Goldman Sachs, Morgan Stanley, and Evercore.

This stock movement comes after EVgo secured a $1.25 billion guaranteed loan facility from the U.S. Department of Energy on Thursday. Announced earlier in early October, this loan aims to support the expansion of publicly available electric vehicle charging infrastructure across the United States. Since the announcement of the loan on October 2, EVgo's stock had increased by approximately 61% until Monday.

In 2024, EVgo's stock has experienced significant volatility, trading as low as $1.65 on April 25 and as high as $9.07 on October 25. Today's price 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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