This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.
This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.
What happened
Last week, in a short series of thrilling stock market sessions, a tiny, all-but-unknown Australian maker of electrical equipment — Tritium DCFC Limited (NASDAQ: DCFC) — rocketed to stock market stardom. President Joe Biden appeared to make Tritium the centrepiece of his $7.5 billion plan to build a nationwide network of electric vehicle charging stations, you see. And before you knew it, Tritium stock had exploded 130% higher.
But easy come, easy go. Just two days after its run higher began, Tritium stock lost all its momentum and proceeded to plunge. On Monday, that slump continued and, as of 11:35 a.m. ET, Tritium shares are down another 10.2%.
So what
On Friday, you see, after close of trading for the weekend, Tritium notified investors some shareholders may be preparing to cash in on those gains.
Filing an F-1 statement with the SEC [Securities and Exchange Commission], Tritium advised that insider shareholders may be preparing to sell 115.4 million shares of stock that they already hold, as well as 8.4 million warrants that confer the right to buy 21.8 million more shares.
Now what
In short, there’s now the potential for more than 137 million shares of Tritium to soon flood onto the market and swamp demand for the stock, driving down share prices even more than they’ve already fallen.
Investors who’ve already seen almost all of their gains from last week washed away aren’t interested in waiting around for the next flood. They’re selling Tritium shares en masse. And given that Tritium is unprofitable and burning cash, and yet the stock still sells for a multiple of 25 times sales, I cannot say I blame them.
This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.
The post Why Tritium shares keep falling appeared first on The Motley Fool Australia.
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More reading
- Why Tritium shares dropped 15% today
- Zap! Tritium (NASDAQ:DCFC) share price rockets another 65%. What’s next?
- Tritium (NASDAQ:DCFC) share price rockets 39% on what Biden describes as ‘great news for the planet’
- Why did the Tritium (NASDAQ:DCFC) share price just leap 7%?
- Here’s how Tritium (NASDAQ:DCFC) has been performing since listing in the US
Rich Smith 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.
This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.
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