This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.
What happened
Tritium DCFC Limited (NASDAQ: DCFC) saw its shares jump 15.7% on Wednesday. It was a volatile day, though, as the stock made big gains only to end the day on the negative side. The company, which produces direct current fast chargers for electric vehicles, saw its stock close at $7.92 on Tuesday then open Wednesday at $8.12 before jumping all the way up to $9.16 in the first hour of trading. As the selling began, the stock dropped all the way to a low of $7.65 in the afternoon. The stock is still closer to its 52-week low of $6.42 than its high of $19.75.
So what
Thanks partly to the current conflict between Russia and the Ukraine, the price of Brent Crude Oil has shot up above $114 a barrel. While that may be good for oil companies, it is also good for electric vehicle makers and any business connected with electric vehicles. The prospect of increased gas prices has convinced more consumers to look into electric vehicles and more governments to make decisions to boost EV production. On Tuesday, President Joe Biden specifically mentioned his administration plans to build more charging stations.
Even before President Biden's remarks, Tritium was operating with plenty of tailwinds. It recently said it had sales of $141 million in 2021, up 136% over 2020 sales. In the last six months of 2021, the company said it had sales of $98 million, up 416%, year over year.
There are several reasons why investors remain wary, though. The company isn't profitable, hasn't filed a true quarterly report yet, is relatively unknown, and is dealing with supply issues. The company said its contracted backlog as of Dec. 31 equals 48% of its 2022 revenue target, adding it expects $170 million in revenue in 2022.
Now what
The stock is still down more than 22% for the year. The big reason for Wednesday's wild swing is that a lot of investors, frustrated with the stock's decline, jumped at the opportunity to sell when the shares rose. The stock has only been trading as a public company on the NASDAQ since Jan. 14 of this year, not long before the company mentioned it plans to build a fast-charging plant in Lebanon, Tennessee.
There's a lot of hype around many EV stocks, so today's wild swing reflects both the excitement and the skepticism around a relatively new industry.
This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.
