Why ChargePoint Stock Slumped This Week
It's safe to say that almost no investor likes it when one of their investments pulls off a reverse stock split. For very good reasons, this is generally seen as a desperate attempt to remain in compliance with the minimum share price listing requirements imposed by U.S. exchanges.
So, it wasn't shocking at all that ChargePoint Holdings (NYSE: CHPT) took a real hit to its stock price largely because of the move -- which actually obscured more than one positive news item about the company. According to data compiled by S&P Global Market Intelligence, ChargePoint's share price fell by more than 22% over the course of the trading week.
ChargePoint ripped the bandage off on Wednesday, formally splitting its stock at a ratio of 1-for-20. It's important to note here that no stock split, reverse or otherwise, changes the underlying value of a company. In this case, the drastically reduced number of shares is offset by a higher per-share price.
Source Fool.com
