Massive supply chain issues disrupting a entire country, inferior tech design and products, massive competition coming from Tesla, and a massive share unlock this week increasing the float over 1,900%
Tritium Charging's (DCFC) stock could see some difficult times ahead
About to get blown away by Tesla
After the news this past week that Tesla supercharger network will be open for all EVs later this yr, starting in Europe. I understood the negative implications for the Europe based EV charging companies like tritium especially given Tesla’s first in class charging infrastructure and performance.
So I took a bit of a deeper dive into Tritium and found the impending total disruption of their market share from tesla coming online for all EVs may actually be the least of it’s problems.
#Shitium
The Australian based company that badly missed its Q1 revenue estimates and blamed it on the supply chain issues in the ports in California projected a much stronger Q2 due these supply chain issues easing
However it appears nothing can be further from the truth. You see tritium chargers according the industry experts I spoke to break down a lot, more often then most charging stations and tritium has no spare parts (due to supply chain issues) the result is these charging stations can go months at time without being fixed. This travesty has been widely reported in Australian media see the links below and shockingly tritium has refused to to respond to reporters questions about the supply chain issues while their competition Evie seems to be gaining mkt share on hem literally by the day
Please take the time and read through the four articles below covering Tritum’s massive problem.
Broken chargers a headache for electric vehicle owners
“Beyond a joke:” Number of busted EV chargers causes concern as uptake jumps
Why are so many EV charging stations out of order? Are they reliable?
EV Charging Networks left in a state of disarray
Even very pivotal and important tritium charging spots in Australia remain broken for months on end
This has organically created a quite hysterical hashtag on twitter for tritium called #Shitum
Drivers in Australia report it is nearly impossible to get from Sydney to Melbourne in a EV, unless you are driving a Tesla now and using their chargers because the tritium chargers are usually down, and cannot get fixed as they apparantly do not have the spare parts.
I spoke with a project manager at ChargeFox the company that runs the stations using the tritium chargers throughout Australia and asked why Tritium was having such major issues…
his words “bad design, lots of replacement parts, supply chain issues, poor charger availability”.
I am no supply chain expert but I don’t think these supply chain issues can be blamed on the ports in California, I would project that their recent earnings have taken a larger than projected hit, coupling these massive issues with tesla entering the chat Tritium outlook looks very bleak. The fact that they are over 10 days overdue now for their FY21’ filings and last week hired a new auditor don’t seem very promising either.
I have also been told by a very well respected reporter in Australia that there have been rumblings that they can't fill their orders. Obviously this is not confirmed reporting another red flag to keep a eye out for in the near term
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Fundamentally Failing
Not that the company didn’t have problem before all of this as net income become worse even as sales have grown…
Massive unlock this week
But the biggest problem for the stock is the massive unlock coming this week of over 120 million shares, what’s worse the PIPE holders here got in this POS at a insane discount of $6.00 which may be the cheapest PIPE i’ve ever seen for a SPAC by far.
Just imagine if back in January when indices were at all time highs they had to raise a discounted PIPE round after failing to meet minimum cash requirement, imagine what kind of discount this stock should get now after the indices have all crashed ?
Fair mkt value here can’t be more than 4.00 aside from all the issues mentioned above
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, it also has very weak 5% institutional ownership, and it’s closest comp ALLG which actually fundamentally a much stronger company than tritium is trading around $4.00
Given the current issues for tritium specifically I would not be surprised to see the stock price for DCFC careen lower in the short term to around $4. Long term we are also bearish on the stock. There are a few other suspicious things about this company I am looking into and will update you once I get more information I just wanted to make sure to get this information out before the unlock.
Summary:
Tritium in my opinion is a failing business model
With inferior design and product according to the people at chargefox themselves
They are currently losing mkt share rapidly to evie.
They stand to take a huge heat as Tesla rolls out use of its chargers in Europe
They have a dirt cheap PIPE weak inst ownership and a massive 500% increase in float coming this week
they are late on financials and recently hired a new auditor
Disclosure:
I am currently own august puts and stand to profit if the stock goes down I may increase or sell my position in DCFC at any time. I was not compensated by anyone in any way for anything i’ve written
I want to work for a short book contact me :)