The Novonix Ltd (ASX: NVX) share price is falling on Friday.
In morning trade, the battery materials and technology company's shares are down 2% to $2.22.
This follows the company being quizzed by the Australian share market operator this morning.
What's happening?
This morning Novonix responded to an ASX Aware Query or please explain request.
The stock market operator highlighted that the Novonix share price rocketed 20% higher on Tuesday from $1.79 to $2.15 despite there being no news.
And then lo and behold, big news was unveiled a couple of days later. That news was of course Novonix being selected for a $240 million government grant.
The response
Novonix admitted that it was aware of the grant selection on 14 October and that "does consider the Information to be information that a reasonable person would expect to have a material effect on the price or value of its securities."
However, it felt that it was "an incomplete proposal or negotiation" and advised that it was "prohibited from disclosing its selection […] prior to the DOE making a public announcement about the matter."
In fact, the company was "advised by DOE that failure to abide by this requirement could result in forfeiture of the opportunity."
Asked why it did not request a trading halt during the interim period, management appeared to suggest that the market should have been expecting this news as "NVX was considered a logical candidate for the grant funding."
Furthermore, it "had been monitoring information sources for any suggestion that confidentiality in the Information had been lost and watching NVX trading volumes and prices very closely."
So, following the aforementioned 20% gain by the Novonix share price on Tuesday, it decided to act and requested a trading halt before the commencement of trade on Wednesday. It explained:
NVX noted the increase in NVX trading volume and prices over the course of 18 October 2022 and despite the fact that NVX believed confidentiality in the Information had not been lost, NVX decided that it would be prudent to go into a trading halt from 19 October 2022 in order to manage its continuous disclosure obligations until such time as it was in a position to announce the Information.
