Why One Fund Cut $80 Million in Chart Industries Stock Ahead of Baker Hughes Buyout

Investment firm No Street GP LP significantly reduced its stake in Chart Industries, divesting 565,000 shares for an estimated $79.7 million, leaving a remaining position of 375,000 shares valued at $75.1 million. This strategic reduction is driven by Chart Industries' pending acquisition by Baker Hughes at $210 per share by mid-2026, which caps the stock's upside and transforms it into an arbitrage play rather than a high-conviction growth opportunity for a portfolio focused on fast-moving names. Despite Chart Industries' robust operational performance, including record orders and a $6 billion backlog, the impending deal limits its potential for further fundamental re-rating.

Analysis

San Francisco-based investment firm No Street GP LP significantly reduced its stake in Chart Industries (GTLS) by 565,000 shares, decreasing its position by an estimated $79.7 million. This divestment, reducing their holding to 375,000 shares valued at $75.1 million, is driven by the pending acquisition of GTLS by Baker Hughes for $210 per share by mid-2026. The firm views GTLS as an arbitrage play, limiting its appeal for a growth-focused portfolio that includes names like AppLovin and Uber.

Operationally, Chart Industries demonstrates robust performance, with third-quarter orders reaching a record $1.7 billion, a 43.9% year-over-year increase. Adjusted operating income stood at $251.5 million, yielding a strong 22.9% margin, alongside $94.7 million in free cash flow and a substantial $6 billion backlog. However, GAAP results were negatively impacted by a $266 million termination fee from previously abandoned merger talks.

The impending acquisition effectively caps GTLS's stock upside, transforming it into a "slow-moving arbitrage position" rather than a high-conviction growth idea. This limits its alpha generation potential for funds prioritizing fundamental re-rating opportunities. GTLS shares, currently at $203.54, have outperformed the S&P 500 by 5 percentage points over the past year, indicating prior strong performance now constrained by the deal.

Key Decisions for Investors

• Investors should evaluate the arbitrage spread between GTLS's current price of $203.54 and the $210 acquisition price, considering the time horizon until mid-2026 for potential risk-adjusted returns.
• Growth-oriented portfolios may consider reallocating capital from GTLS to opportunities with uncapped fundamental re-rating potential, aligning with No Street GP's strategic shift.
• Monitor the Baker Hughes acquisition's progress, including regulatory approvals and any potential changes to deal terms, as these factors could influence the final realized value.