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

a man holds his arms out and shrugs his shoulders as if indicating he doesn't know the answer to a question he's been asked.
Materials Shares

Why is this ASX 200 mining stock crashing 28% today?

Investors are rushing to the exits in large number. But why?

Read more »

A man checks his phone next to an electric vehicle charging station with his electric vehicle parked in the charging bay.
Materials Shares

Here's the lithium price forecast through to 2028

Will lithium prices be recovering any time soon? Let's find out.

Read more »

A male investor wearing a blue shirt looks off to the side with a miffed look on his face as the share price declines.
Materials Shares

Why is the BHP share price falling today?

Today's decline could actually be good news for the miner's shareholders.

Read more »

Businessman working and using Digital Tablet new business project finance investment at coffee cafe.
Materials Shares

Pilbara Minerals shares crashed 17% in February: Is this a buying opportunity?

Do analysts think that now is a good time to buy this lithium giant's shares? Let's find out.

Read more »

Business people discussing project on digital tablet.
Materials Shares

After a 5% price drop on its 2024 results, should I buy shares in this ASX 200 heavyweight?

Is now a good time to put money into this giant's shares? Let's find out.

Read more »

Three miners looking at a tablet.
Materials Shares

2 of the very best ASX 200 mining stocks to buy in March

Goldman Sachs thinks these mining giant's could generate big returns over the next 12 months.

Read more »

Two men in hard hats and high visibility jackets look together at a laptop screen at a mine site.
Earnings Results

Sayona Mining share price wobbles amid growing half-year losses

Sayona Mining shares are in the spotlight following the lithium miner’s half-year results.

Read more »

Miner holding cash which represents dividends.
Dividend Investing

Here's the BHP dividend forecast through to 2029

Is the Big Australian's dividend heading higher or lower from here? Let's find out.

Read more »