Shareholders are electrified by the prospects ahead following the company’s recent news…
The post Novonix (ASX:NVX) share price surges another 12%. Here’s why appeared first on The Motley Fool Australia. –
The Novonix Ltd (ASX: NVX) share price obviously had more in the reserve tank after lifting off yesterday.
After emerging from its trading halt, the lithium-ion battery tech company gained 15.6% yesterday. The momentum has clearly rolled into trading today, with the company adding an additional 12.6% to its share price.
Big investment for the future
The ignition for investors’ excitement appears to stem from the Novonix announcements yesterday. These included a capital raising program and a strategic investment, which go hand in hand.
Pertaining to the capital raising, Novonix is intending to issue 77,962,578 new ordinary shares. These shares are being priced at A$2.60 per share which, some quick math suggests, is roughly $202.7 million of capital raised.
It was revealed that United States energy company Phillips 66 (NYSE: PSX) will purchase the new Novonix shares, taking a 16% equity stake in the ASX-listed company in the process. This news catapulted the Novonix share price higher.
While Phillips 66 is an oil company, by and large, it also develops carbon anodes and materials for lithium-ion batteries using the by-products of its main business. Reportedly, the US company’s rationale for the investment is to advance its commitment to pursuing lower-carbon solutions.
Additionally, the partial acquisition will support its endeavour to sure-up a domestic supply chain for the growing electric vehicle market in the US. In the process, Phillips 66 will be providing Novonix capital for expansion, according to the company:
Phillips 66’s investment will provide Novonix with the capital needed to support growth and ongoing R&D as the group continues to scale synthetic graphite production and develop new technologies for higher-performance energy storage applications.
These efforts are certainly heavily in focus after the alarming climate report released by the IPCC yesterday. Essentially, the in-depth study called for a swift and decisive shift away from oil, gas, and coal within this decade.
Novonix share price in review
Any lucky shareholders that have retained their holdings in Novonix over the last year have enjoyed significant share price appreciation. The past year has seen the Novonix share price increase an astonishing 231%. Comparably, the S&P/ASX 200 Index (ASX: XJO) has climbed 23.5%.
Lastly, the market capitalisation on Novonix is now residing at around $1.58 billion.
Should you invest $1,000 in Novonix right now?
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Motley Fool contributor Mitchell Lawler has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.