September 1, 2020 – Blink Faces Another Suit in Florida
Another proposed class action claims Blink’s misleading statements concerning the nature and economic potential of its charging station network caused stockholders to lose money after two analyst reports questioned the company’s representations.
The 19-page case is at least the second proposed class action filed in Florida, where Blink is headquartered, and looks to cover anyone who purchased or otherwise acquired Blink Charging Co. (BLNK) securities between March 6, 2020 and August 19, 2020.
Blink Charging Company and its two top officers have been hit with a proposed class action that claims investors were harmed financially after it was revealed the company “vastly overstate[d] the size, functionality, usage, and economic potential” of its electric car charging network.
Filed on behalf of investors who purchased or acquired Blink common stock between March 6, 2020 and August 19, 2020, the 20-page lawsuit alleges Blink’s failure to disclose “material adverse facts” about its business, operations and prospects resulted in a dramatic drop in stock price upon the release of two analyst reports condemning the Miami Beach company for its public statements.
The timeframe in the lawsuit begins on March 6, 2020, when Blink issued a press release announcing the company had partnered with “One of Nation’s 50 Fastest Growing IT Firms” to add on to its network of 15,000 charging stations at which drivers can “easily charge” their electric vehicles, the complaint says.
On April 2, the suit continues, Blink filed its 2019 Annual Report in which the company divulged a net loss of $9.6 million for the year and reiterated its status as “a leader in electric vehicle (EV) charging equipment that has deployed over 23,000 charging stations, many of which are networked EV charging stations, enabling EV drivers to easily charge at any of its charging locations worldwide.”
In subsequent financial reports and press releases, Blink continued to emphasize its purportedly vast network of charging stations, applauded an Apple Maps update that would allow for electric vehicle charge routing, and touted a purported agreement with real estate services firm Cushman & Wakefield for the marketing and potential deployment of charging stations to its clients, the suit says.
According to the case, however, Blink’s public statements were “materially false and misleading” given they failed to disclose that many of the company’s charging stations were damaged, neglected, non-functional and inaccessible, and that both Blink’s purported partnerships and expansions with other companies and its network growth were overstated.
The lawsuit alleges investors began to learn the truth when analyst Culper Research published a scathing August 19 report in which the firm claimed Blink has “vastly exaggerated” the size of its EV charging network in order to rob investors for the benefit of company insiders. According to the suit, while Blink claimed to offer at least 15,000 charging stations, Culper estimated the company’s functional network consists of just 2,192 stations, “a mere 15% of this claim.”
Culper went on to charge that “almost no one” uses Blink charging stations, many of which the report described as in “decrepit condition.” The research firm visited 242 Blink stations in 88 locations across the U.S. and found “a plethora of neglected, abused, non-functional, or otherwise missing chargers,” the case states, adding that Culper reported the average Blink charger is used for just six to 38 minutes per day.
According to the complaint, Culper raised questions about Blink’s agreement with Cushman & Wakefield, finding that the real estate firm never committed to installing chargers at existing properties or agreed to install a certain number of chargers in the future. The case says Blink never filed a Form 8-K press release with the SEC announcing the C&W deal, concluding that “either the deal with C&W is immaterial, non-existent, or Blink failed in its disclosure duties.”
Also on August 19, Mariner Research Group published a “highly critical” report in which it stated Blink’s revenue growth has “significantly seriously lagged the EV industry” while its CEO, who is named as a defendant in the suit, made more than $7 million in income. The report chalked Blink’s poor revenue growth up to “persistent issues around product quality, customer churn, and user experience,” the case says, concluding that the company is worth significantly less than its market value at the time.
As a result of the duel reports, Blink’s stock price fell drastically, from an August 18, 2020 close of $10.23 per share to an August 20 close of $7.94, representing a roughly 22.4 percent drop over two days and injuring the company’s investors.
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