It’s a tough pill for investors of Enovix (NASDAQ:ENVX) stock to swallow, no doubt. Any share-price gains made over the holidays have been wiped out today, it seems. This is due to an update provided via live stream yesterday, in which Enovix’s executive chairman dropped a bombshell.
Perhaps it wasn’t meant to be a bombshell, but that’s how financial traders interpreted the news. Just to provide some background info, Enovix is a California-based specialist in “advanced silicon-anode lithium-ion battery development and production.”
The company’s crown jewel is its 3D cell architecture, which is advertised for increasing energy density and maintaining high cycle life. Enovix had some positive news in December, as the company received ISO 9001:2015 certification and appointed Raj Talluri as Enovix’s new CEO.
However, any share-price appreciation from the 2022’s holiday season is now lost. So, let’s delve into the unfortunate development that’s putting Enovix’s shareholders in a sour mood.
What’s Happening With ENVX Stock?
ENVX stock was down more than 40% as of 11:00 a.m. Eastern today, so clearly, something is going on. As it turns out, Enovix Executive Chairman T. J. Rodgers hosted a special presentation yesterday via live stream.
What’s so bad about that? The major issue, evidently, is that Enovix requires funding to advance its Gen2 battery cell technology production line. This, unfortunately, could result in production delays.
As Seeking Alpha reports, J.P. Morgan analyst Bill Peterson was “surprised by the company’s expectation of further delays in the Gen2 production ramp.” Still, Peterson has an “overweight” ENVX stock, which is similar to a “buy” rating.
Moreover, Peterson assures that Enovix’s executive management team “prudently feels compelled to get the production strategy 100% flushed out rather than meet an arbitrary production timeline with potentially less productive manufacturing lines.” So, perhaps the J.P. Morgan analyst is willing to forgive the production delay.
Today’s stock traders aren’t as forgiving as Peterson, though. Their response has been to dump ENVX stock, and there’s no telling how much lower it might go today.
On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
