This ASX All Ords stock just crashed 22%. Here's why

Let's see why this stock is having a bad day after returning from a trading halt.

| More on:
An unhappy investor holding his eyes while watching a falling ASX share price on a computer screen.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Australian share market may be pushing higher again on Wednesday, but the same cannot be said for Novonix Ltd (ASX: NVX) shares.

The battery materials and technology company's shares are back from their trading halt and crashing deep into the red.

At the time of writing, the ASX All Ords stock is down 22% to 75 cents.

Why is this ASX All Ords stock crashing?

The catalyst for today's decline has been news that the battery materials technology company has successfully completed an institutional placement.

According to the release, the ASX All Ords stock is raising $44.4 million through a fully underwritten placement of new shares to institutional and sophisticated investors at an offer price of 60 cents per new share.

This represents a sizeable discount of approximately 38% to its last close price of 96.5 cents.

Novonix won't be stopping there. It is now pushing ahead with its non-underwritten share purchase plan (SPP) to eligible retail shareholders.

This SPP aims to raise approximately $5 million and will provide each eligible shareholder with the opportunity to apply for up to $30,000 worth of Novonix shares. But if demand exceeds $5 million, the ASX All Ords stock may scale back applications. This will be undertaken at the same price as the institutional placement.

Novonix's chair, Admiral Robert J. Natter, was pleased with the cash injection. He said:

The Institutional Placement was supported by the Company's existing institutional shareholders. It is also pleasing to have the opportunity to welcome a number of new high quality domestic and international institutional investors to our register. As well, it is encouraging to receive the support of existing investors and major shareholder Phillips 66, for the Company's strong growth agenda.

The ASX All Ords stock's CEO, Dr. Chris Burns, revealed that the funds will support its Anode Materials deliver on offtake agreements that were announced this month with Stellantis and Volkswagen's PowerCo business. He said:

We are pleased to have secured the funding required to support growth in the NOVONIX Anode Materials business following announcements this month of offtake agreements with both Stellantis and PowerCo. This funding will be used to achieve 3,000 tonnes per annum of production capacity at our Riverside facility in 2025 and enable continued access of our Department of Energy's Office of Manufacturing & Energy Supply Chains grant of up to US$100 million.

Despite today's sizeable decline, Novonix's shares are up 23% since this time in August.

Motley Fool contributor James Mickleboro 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 Scott Phillips.

More on Materials Shares

Image of young successful engineer, with blueprints, notepad and digital tablet, observing the project implementation on construction site and in mine.
Materials Shares

How much could $5,000 invested in BHP shares be worth in a year?

Here's what one leading broker believes could happen with this miner's shares next year.

Read more »

A woman jumps for joy with a rocket drawn on the wall behind her.
Materials Shares

Bell Potter says this ASX lithium stock could rocket 90%+ in 2025

Let's see why the broker is bullish on this lithium developer.

Read more »

A female employee in a hard hat and overalls with high visibility stripes sits at the wheel of a large mining vehicle with mining equipment in the background.
Materials Shares

Forget Fortescue shares and buy this ASX iron ore stock

Bell Potter thinks this iron ore miner could deliver big returns over the next 12 months.

Read more »

Miner looking at a tablet.
Materials Shares

Are ASX lithium shares prime real estate for value hunters?

Can these stocks recharge returns for investors?

Read more »

Image of young successful engineer, with blueprints, notepad and digital tablet, observing the project implementation on construction site and in mine.
Materials Shares

Are Rio Tinto shares a buy for its lithium plans?

Let's see what one leading broker is saying about the mining giant.

Read more »

Man with rocket wings which have flames coming out of them.
Materials Shares

Guess which ASX 300 lithium stock is rocketing 20% on huge Volkswagen news

Not all shares are being dragged lower by the market today.

Read more »

Dollar sign in yellow with a red falling arrow in front of a graph, symbolising a falling share price.
Materials Shares

Ouch: The Pilbara Minerals share price just hit a multi-year low

It's been a tough day for lithium investors.

Read more »

Modern accountant woman in a light business suit in modern green office with documents and laptop.
Materials Shares

Big ASX news: CEO buys 2.5 million Sayona Mining shares

This CEO has finally made a big share purchase.

Read more »