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Why is the Pod Point share price dropping?

Pod Point IPO-ed as promising electrification company on the London Stock exchange, but the stock price has been rapidly falling since 14 June. The news outlets are quiet. What could be the reason?  

IPO and promising future of Pod Pint

Pod Point had a great potential at its IPO. Petrol cars will be phased out in the UK from 2030 and electric cars are the obvious replacement. This means that a large number of new charging points will be installed which is Pod Point’s  business. In addition the UK Prime Minister Boris Johnson announced that all new houses and offices in England have to be built with electric car charging points.

On 9th November, 2021 Pod Point had it’s IPO with the share price of 221p. Soon The Monthly Fool published an article that this could be the EV stock that rampaging in 2022. In February the Investors’ Chronicle wrote that the company was trades five times revenue (198p), which is a reasonable price.

Clouds over the share performance and new CFO

On 30 June Morningstar wrote that David Wolffe will be the new CFO in 2023. Wolffe will leave Ted Baker which had quite a disappointing share drop since he became the CFO in 2020. This might be reason for the scepticism of Pod Point shareholders, but PODP share started its decline much earlier than this announcement.

Ted Baker share price since 2019

EDF ownership and French national politics

Pod Point has a quite concentrated shareholding since EDF acquired a majority stake. According to the company’s annual statement, EDF owns 78% of the shares. EDF is France’s largest electricity generator and market listed company since 2007. In February 2020 the French finance minister said that all options are on the table to nationalise the already 84% state owned EDF. In 13th April, 2022 it was reported that EDF could sell it’s renewable business to reduce dept and focus on nuclear energy. At that time the PODP share price was rising. On 7th July the plan to fully nationalise EDF was announced. The next month on 13th July the EDF shares were suspended until the nationalisation plans were finalised. In the past month EDF share price rose 51%, but its seems the future of it’s renewable holding is still in question. At the time of witting Pod Point share price is at 100.5p which is a 56% discount to the IPO price.  

Full disclosure: The writer previously held shares but,  currently has no position in PODP.L .

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