Al Root

EVgo stock plummeted early Tuesday after the electric-vehicle-charging company announced a secondary share sale.

Monday evening, EVgo said an affiliate of LS Power Equity Partners IV was planning to sell 23 million shares of EVgo stock via an underwritten offering.

LS Power gets the money from the sale. No new shares are being offered to the public.

EVgo stock was down about 17.4% in premarket trading at $5.22 Tuesday, while S&P 500 and Dow Jones Industrial Average futures were down 0.3% and 0.4%, respectively.

Typically, a drop like that might be reserved when a start-up -- such as EVgo -- sells new shares to fund operations. That isn't the case this time with an existing shareholder selling the stock. Still, the sale is relatively large. EV go has about 303 million shares outstanding. Selling a large block of stock -- equivalent to about 8% of shares outstanding in this instance -- can impact share prices.

It can also be a signal to other investors to take some profits. Coming into Tuesday trading, EVgo stock was up more than 200% over the past six months. Wall Street upgrades, and a Federal loan guarantee that brought in more capital helped push shares higher.

LS Power develops North American power and energy infrastructure. In January 2020, it completed the acquisition of EVgo, which became a publicly traded company in July 2021 after completing a merger with a special-purpose acquisition company.

Coming into Tuesday trading, EVgo stock was up about 77% year to date.

Write to Al Root at allen.root@dowjones.com

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December 17, 2024 07:51 ET (12:51 GMT)

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