Why ChargePoint Holdings Is Floundering Today

Shares of ChargePoint Holdings (NYSE: CHPT) had fallen nearly 13% as of 11:39 a.m. ET today after the company got hit with a noncompliance notice from the New York Stock Exchange (NYSE) after the market closed on Friday.

Stock trades for less than $1

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The NYSE notified ChargePoint that it is not in compliance with NYSE bylaws because its stock has traded for less than $1 for 30 consecutive trading days. The notification does not immediately impact trading of the stock or lead to the company being delisted from the NYSE.

ChargePoint in a filing with the Securities and Exchange Commission (SEC) said it will notify the NYSE by March 5 that it plans to get into compliance with the NYSE's bylaws. It has six months to get back into compliance by getting its share price over $1. The stock must also have an average closing share price of $1 over a 30-day trading period.

ChargePoint will consider several options to lift its stock price above $1 including a potential reverse stock split. A reverse stock split involves reducing the share count and raising the share price without changing the market capitalization of the stock. It's a tool companies use to get their share price higher for a variety of different reasons.

A hit from Trump and weakening financials

ChargePoint and the rest of the electric vehicle sector took a hit after President Donald Trump's administration recently paused a $5 billion initiative put into place by former President Joe Biden's infrastructure bill to build electric charging stations on highways across the country.

Additionally, ChargePoint is still losing significant money and has seen revenue decline in the first nine months of 2024 compared to the same time period in 2023. At the end of third quarter, ChargePoint had close to $220 million of cash and equivalents and close to $300 million of debt, although there are no debt maturities until 2028. I think investors can steer clear of the stock for the time being.

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Bram Berkowitz has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.