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Tanks for nothing: Mystery of Novonix and the $1.8 billion that vanished in an instant

Business

Novonix should have been celebrating last weekend but instead the board of the Brisbane-based battery company was probably scratching its head wondering where $1.8 billion went.

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It had been a heady 2021 for Novonix. Its share price has seen staggering growth of 800 per cent as investors bought into a company that was likely to soon become the only significant producer in the US of graphite, a key component of electric vehicle batteries.

And early on Friday the company had been notified that it was now being included in the S&P ASX 200. It was joining the big boys of the market.

But sometimes when shares get a bit ahead of themselves, investors get nervous and look for any excuse to take their profits and run and Novonix’s shares have also been pushed along on some fairly flimsy news. Tech stocks had also been facing a sell-off.

On Friday the company’s share price tanked by more 30 per cent and for no solid reason. A theory, though, was that it could have been a misreading by investors of a notice about the shareholding of a founding director who had only days earlier retired, Greg Baynton.

The Baynton notice was filed late on Wednesday and by Friday morning investors were looking at the front page of the notice which showed he had no direct shareholdings in Novonix. That could have been seen as a huge blow to its credibility.

The problem was the second page had his real holdings which were not held directly by Baynton but in three companies of which he was a shareholder. He still owned 500,000 shares. But it was all there in the notice, plain as day.

The absurdity of the sell-off was underscored by what happened later when its share price rebounded by 15 per cent in early trade before settling back to a 4 per cent rise before lunch. It has since jumped back to close to $10 before selling off again on Friday as the broader market sold down.

The ASX issued what’s known as a speeding ticket, really a please explain for why the share price was acting the way it was and Novonix was stumped, but came up with a few theories.

“The company has received inquiries from shareholders regarding the final director’s interest notice for Greg Baynton that was lodged with the ASX on December 2. NVX confirms that Greg Baynton has not sold any of his shareholding in NVX and his shareholdings are correctly set out on page 2 of the final director’s interest notice,” the company said in its response.

The only other news affecting it was that Tesla was seeking an extended tariff waiver for Chinese graphite imported into the US because only it could supply sufficient quantities, because Novonix was not scheduled to reach 40,ooo tonnes of graphite by 2025 and 150,000 tonnes by 2030.

There was also an AFR story that referenced Novonix and questioned how it could be enjoying a market value approaching $6 billion when its revenue was only $1.6 million.

It had also recently informed investors at its AGM that its chairman Tony Bellas was moving aside for an American because now almost everything it did was in America or Canada.

However, there was also a big trade of more than 8 million shares earlier in the week, about 2 per cent of its total shareholdings.

 

 

 

 

 

 

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