What happened
Shares of lithium battery maker Enovix (ENVX +2.63%) are down 45.8% as of 12:36 p.m. ET Wednesday following Tuesday evening's troubling video presentation. In a livestreamed event held after trading hours, executive chairman T.J. Rodgers told investors that the ongoing optimization of the company's Fab-1 battery production facility is taking longer than initially expected.
At the same time, Rodgers indicated the company may raise funds sometime this year to continue the development of its second-generation battery.
So what
The potential value of its battery technology isn't in question. Lithium is the only energy-storage material light enough, affordable enough, and available enough to power everything from cellphones to laptops to electric vehicles. Enovix's 3D silicon lithium-ion cell design gets even more functionality out of this battery material.
Making high-quality quantities of these first-generation batteries, however, is proving tricky. While the company shipped the first commercial batch of these lithium-ion batteries from its so-called Fab-1 production site in Fremont, California, in June of last year, Enovix now doesn't expect the production process for these cells to be perfected until near the end of this year.
NASDAQ: ENVX
Key Data Points
The company is moving on in the meantime. Even before its first-generation battery facility is operating ideally, it's now putting more resources into the development of its second-generation batteries. But this effort is also proving more complicated (and apparently more expensive) than initially anticipated.
Now what
Although the idea of three-dimensionally structured lithium cells has been around for years, the process for manufacturing them in bulk requires more refinement. To this end, today's news isn't entirely surprising.
From an investor standpoint, however, the status of the production process is irrelevant. What is relevant is when a stock's underlying company will be able to begin generating significant revenue en route to profitability. Clearly, the market believes this milestone for Enovix was just pushed further down the road, with share dilution likely in the meantime.
This realization is also materializing less than a week after now-former Micron executive Raj Talluri was named Enovix's CEO beginning later this month. It's yet another disruption in a market environment where investors in general -- and Enovix shareholders in particular -- are already digesting a great deal of uncertainty.
This doesn't make Enovix unownable. However, today's steep sell-off only makes a compelling entry point for speculators willing to suffer more sizable losses in search of similarly sizable gains.
