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

No Street GP LP significantly reduced its stake in Chart Industries (NYSE:GTLS) during the third quarter, divesting 565,000 shares for an estimated $79.7 million, leaving a remaining holding of 375,000 shares valued at $75.1 million. This strategic move by the growth-oriented fund is driven by Chart Industries' pending acquisition by Baker Hughes for $210 per share in mid-2026, which effectively caps the stock's upside and reclassifies it as a slow-moving arbitrage play rather than a high-conviction growth opportunity, despite the company's strong operational performance and record orders.

Analysis

No Street GP LP significantly reduced its stake in Chart Industries (GTLS) during the third quarter, divesting 565,000 shares for an estimated $79.7 million. This transaction decreased their holding to 375,000 shares valued at $75.1 million, representing a notable shift from 11.4% to 7.1% of the fund's reportable assets under management. The move aligns with the fund's growth-oriented strategy, which prioritizes fast-moving growth names over capped opportunities.

The primary driver for this divestment is the pending acquisition of Chart Industries by Baker Hughes for $210 per share, anticipated by mid-2026. This acquisition effectively caps GTLS's upside, transforming the stock into a slow-moving arbitrage position rather than a high-conviction growth investment. This reclassification creates a significant opportunity cost for growth-focused funds like No Street.

Operationally, Chart Industries demonstrates strong performance, with third-quarter orders reaching a record $1.7 billion, a 43.9% year-over-year increase, and adjusted operating income of $251.5 million, yielding a 22.9% margin. The company also boasts a robust $6 billion backlog and is well-positioned in energy transition markets. However, GAAP results were negatively impacted by a $266 million termination fee from prior merger talks.

Despite GTLS shares being up 20% over the past year and outperforming the S&P 500 by 5 percentage points, the fixed acquisition price limits further appreciation. The company's strong fundamentals and market positioning in cryogenic equipment for LNG, hydrogen, and carbon capture are overshadowed by the deal's ceiling for investors seeking uncapped growth potential.

Key Decisions for Investors

• Investors should evaluate Chart Industries (GTLS) primarily as an arbitrage play with limited upside potential due to the pending acquisition at $210 per share by mid-2026.
• Consider reallocating capital from GTLS into companies with uncapped growth trajectories if your investment mandate is focused on high-conviction growth opportunities, acknowledging the opportunity cost.
• Monitor the progress and certainty of the Baker Hughes acquisition, as any changes to the deal terms or timeline could alter the stock's risk-reward profile.