Enovix Corp (NASDAQ: ENVX), on Wednesday, said it was taking longer than expected to optimise production of its first-generation batteries at the Fremont facility. Shares crashed about 45% this morning.
Why is it significant for investors?
Enovix already shipped the first batch of its commercial lithium-ion batteries last year. But perfecting its Fab-1 production line is now expected to take until the end of 2023, the company revealed in a video presentation today.
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Enovix shares were particularly hit hard on this stock market news because it could delay “profitability”.
Put together with the U.S. central bank that seems adamant on keeping rates higher for longer, that spells trouble for Enovix Corp as such an economic backdrop is known to be rude to the profitless tech companies.
In November, the Nasdaq-listed firm said its per-share loss expanded sharply to 15 cents in its third financial quarter. $0.01 million in quarterly revenue was also well below the Street estimates.
Enovix could raise more funds this year
Interestingly, Enovix does not plan on waiting to optimise its Fab-1 production line.
According to T. J. Rodgers (Executive Chairman), the company wants to push forward with the development of its second-generation batteries.
The problem with that, though, is it’s proving to be more expensive. To that end, the California-based company said it could raise more funds this year – making up for another reason why Enovix shares were punished on Wednesday.
Over the past five months, this stock has lost roughly 125%.
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