What’s going on with Volta stock

Today’s poor performance of the main market index triggered heavy selling, which is why Volta stock is plummeting 10.2%.

The shares of the electric vehicle (EV) charging business got a price reduction today, and while analysts still expect Volta (NYSE:VLTA) stock to rise almost 145% from Tuesday’s close, investors aren’t buying it.

Why we care

Volta’s share price continued to fall as the firm’s liquidity issues persisted. Cantor Fitzgerald lowered its price target on Volta to $6 per share from $8 in the aftermath of the company’s cash concerns.

Last week, when Volta announced its quarterly financial results, it also stated something startling in a separate regulatory filing. Because of its financial position as of March 31, management judged “that there is substantial doubt about the company’s ability to continue as a going concern in the next 12 months” owing to its finances.

To put it another way, at the end of March 31, Volta had accumulated losses of $476.9 million and only $205 million in cash balance.

What now

Volta is running out of money fast, and its cash reserves aren’t adequate to cover current operations and growth. In a nutshell, it is suffering from a liquidity crunch that may only get worse.

Another issue that investors must be concerned about now is the possibility of Volta shares delisting. To meet the New York Stock Exchange market capitalization requirements, Volta’s stock price should ideally be $4 per share.

The value of Volta’s stock has dropped nearly 70% this year. It is currently trading at around $2.25 per share as of this writing.

Even though Cantor Fitzgerald still predicts that Volta stock will almost triple in the next year, the market isn’t buying it. Furthermore, Volta is less of an EV stock and more of a media company. The bulk of its income comes from advertising on the EV charging stations it installs. Meanwhile, while electric vehicle producers are rushing to join the charger sector, they are posing a genuine threat to Volta.

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