How to Invest in Ascend Elements

As demand for lithium-ion batteries continues to increase, those looking for growth stocks have taken a keen interest in how to invest in Ascend Elements and similar stocks. Since its founding in 2015, Ascend Elements has been developing a closed-loop system for lithium-ion battery production. The company sources materials from spent lithium-ion batteries and uses them to produce new batteries.

With electric vehicles representing the greatest force behind growing demand, the lithium-ion battery market is expected to increase considerably in value over the next few years. According to research firm McKinsey & Co., the lithium-ion battery value chain -- from the mining of battery materials to the recycling of spent batteries -- will grow from about $85 billion in 2022 to more than $400 billion in 2030.

In 2023, Ascend Elements made tremendous strides toward its lithium-ion battery vision becoming a reality. Expanding on a partnership that began in 2021, Ascend Elements announced in February that it's working with Honda to explore the potential for supplying battery materials for the automaker's electric vehicles (EVs) manufactured in North America.

Another important development for the company was the commencement of operations at its first commercial-scale lithium-ion battery recycling facility in Georgia. With the considerable market opportunity that lies before Ascend Elements, investors are unsurprisingly eager to power their portfolios with it.

But before jumping in with an investment, there are critical things to consider. For instance, how do investors buy shares of Ascend Elements, when will it hold its potential initial public offering (IPO), and are there alternative investment opportunities?

Is Ascend Elements publicly traded?

Is Ascend Elements publicly traded?

Having completed a Series D funding round in February 2024, Ascend Elements is currently a privately held company. That leaves most investors on Main Street unable to pick up shares. In addition to the equity that insiders own, various venture capital firms and other investors have taken positions in the company.

For example, Alliance Resource Partners (ARLP -1.63%), a coal company also with interests in oil and gas, invested $25 million in Ascend Elements in 2023. According to business intelligence company Crunchbase, Ascend Elements has raised a total of $1.7 billion over 14 funding rounds.

When will Ascend Elements IPO?

When will Ascend Elements IPO?

Those comfortable with taking on higher degrees of risk to gain exposure to higher-reward opportunities will oftentimes track privately held growth companies, waiting for them to debut on the public markets. Investors, therefore, with a keen eye on Ascend Elements may be especially motivated to buy the stock during its IPO.

Sadly, investors eager to put a jolt in their holdings with Ascend Elements will have to keep waiting. Ascend Elements is not on the IPO calendar, and there's no sign the company plans to launch an IPO anytime soon.

How to buy

How to buy Ascend Elements stock

While the majority of those looking to buy Ascend Elements stock are currently out of luck, accredited investors may be able to pick up shares even before the stock holds an IPO. Platforms like Forge Global (FRGE 0.52%) offer accredited investors the ability to invest in privately held companies, such as Ascend Elements.

If you aren't an accredited investor but still want exposure to lithium-ion battery companies like Ascend Elements, you're not completely out of luck. There are plenty of similar publicly traded companies to choose from.

Step 1: Open a brokerage account

The first step on your investing journey is to open a brokerage account. There are several options out there, but those new to investing may be best off opening a brokerage account with Fidelity since it offers zero-commission online stock trades.

Step 2: Figure out your budget

Now that you are able to buy and sell stock, it's important to determine how much capital you'd like to dedicate to investing. Perhaps you're in a situation where you can make an investment in a single purchase, or maybe you'd be better suited to slowly building a position over time. In either case, it's important to consider your financial position and ensure you've taken care of basic needs, like establishing an emergency fund.

Step 3: Research related companies

Nowadays, investors have various resources that can help them identify potential stock purchases. While Ascend Elements may not be an investment option for ordinary retail investors, there are comparable companies that may attract investors.

1. Alliance Resource Partners

While the options to gain indirect exposure to Ascend Elements are extremely limited, Alliance Resource Partners is a viable option. It's important to recognize that the company's investment is relatively small, though.

The $25 million investment Alliance Resource Partners made in Ascend Elements through its Series D funding round pales in comparison to Alliance Resource's market cap of about $2.4 billion. The company's oil and gas royalties contribute to the top and bottom lines of its financials. However, the company's bread and butter is coal.

In 2023, for example, coal accounted for 88% of the company's adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA). Since some investors attracted to Ascend Elements may find the company's green energy endeavors appealing, it's important for them to recognize coal's predominant role in Alliance Resource's business before picking up shares.

2. Enovix

Like Ascend Elements, Enovix (ENVX 10.62%) is a lithium-ion battery stock that investors may find enticing. For one, it will satisfy the same growth stock itch investors are looking to scratch with Ascend Elements. Enovix is in the very early innings of its development, generating revenue for the first time in 2022.

Currently, the company is developing a new high-volume manufacturing facility in Malaysia. When it starts operations -- scheduled for the second half of 2024 -- it will represent a major catalyst for the company, helping it to scale production volumes considerably.

Looking to disrupt the traditional lithium-ion battery market, Enovix has developed a lithium-ion battery with silicon anodes. This results in a battery with higher energy density and a better safety profile than traditional lithium-ion batteries, which use graphite anodes.

3. QuantumScape

Like Enovix, QuantumScape (NASDAQ:QS) is also interested in disrupting the traditional lithium-ion battery market. However, the company's product is even more distinct. QuantumScape is developing a solid-state battery that could provide EVs with greater range and quicker charging times -- two factors that could make EVs a lot more appealing to customers.

Skeptics question whether QuantumScape will be able to overcome production challenges that seem foreboding. But it appears the company is making ground. QuantumScape expects to achieve a low production volume of its prototype battery in 2024, with production scaling up in 2025.

Should QuantumScape succeed in its solid-state battery endeavors, the rewards could be huge for investors. Of course, the opposite also rings true, making QuantumScape stock a typical high-reward, high-risk opportunity.

Step 4: Place an order

You're nearly there! Lastly, you'll have to make some final decisions before you own a stock in your portfolio. First, you'll have to decide how many shares to purchase. Second, you'll have to choose what type of order you want to make: a market order or a limit order. When you're done, it's time to click the buy button and congratulate yourself on taking a step toward building your personal wealth.

Profitability

Is Ascend Elements profitable?

As a privately held company, Ascend Elements is not obligated to submit regulatory filings like its publicly traded peers. Consequently, it's difficult to ascertain whether the company is making a profit yet.

However, regarding the top line of the income statement, the company seems to be generating revenue from processing end-of-life batteries and manufacturing scrap at a facility in Georgia, according to a 2022 press release. Presumably, the turning point will be when it commences operations at its facility (in development) in Kentucky, where Ascend Elements will produce battery materials from end-of-life batteries.

The company has a $1 billion supply agreement with an unnamed customer for these battery materials. The agreement is supposed to start in the fourth quarter of 2024 and has the potential to expand to $5 billion over several years.

Should I invest?

Should I invest in Ascend Elements?

Since Ascend Elements hasn't held an IPO, the majority of investors cannot add this stock to their portfolios. If the company does proceed with plans to hold an IPO, it will have to submit regulatory filings, enabling investors to gain greater insight into its financials. When this happens, investors will be able to make a more informed decision about whether the stock is right for them.

Accredited investors, on the other hand, may be able to gain exposure to Ascend Elements now. Of course, only those comfortable with taking on a more speculative investment should consider a position.

ETF options

ETFs with exposure to Ascend Elements

Because Ascend Elements isn't a publicly traded company, investors can't gain exposure to the stock through an exchange-traded fund (ETF). But all's not lost. Several lithium and battery tech ETFs provide exposure to stocks closely related to Ascend Elements.

• Global X Lithium & Battery Tech ETF (LIT 1.45%): With 40 holdings in the fund, this ETF provides exposure to lithium companies and those specializing in lithium-ion batteries. The fund's largest holding is Albemarle (ALB 1.65%), a global leader in lithium production. It also includes EV stocks, such as Tesla (TSLA -1.11%) and Lucid (LCID 0.41%). The ETF has an expense ratio of 0.75%.
• Amplify Lithium & Battery Technology ETF (BATT 1.46%): This ETF offers broad exposure to companies involved in battery production. That includes established lithium producers, like Albemarle; speculative lithium producers, like Lithium Americas (LAAC 7.36%); rare earth metals production company MP Materials (MP -0.19%); and battery manufacturers. The ETF has an expense ratio of 0.59%.
• Invesco WilderHill Clean Energy ETF (PBW 3.28%): Investors looking for broader clean energy exposure will find this ETF a worthy consideration. Through the fund's 75 holdings, investors expand their green energy exposure beyond lithium and battery stocks, gaining exposure to solar, wind, and hydrogen stocks, among others, like renewable energy powerhouse Brookfield Renewable (BEP 0.19%). The ETF has an expense ratio of 0.66%.

Related investing topics

The bottom line on Ascend Elements

With lithium-ion battery demand expected to accelerate in the coming years, it's hardly shocking that investors have battery companies like Ascend Elements on their radars -- especially in light of the sizable production facility the company is developing in Kentucky. However, they'll have to wait before they can pick up shares.

Ascend Elements is still a privately held company, and there's no sign of an IPO in sight. So, investors will have to find alternative investment opportunities. Fortunately, they have options -- from the indirect exposure afforded by Alliance Resource Partners to battery growth stocks like Enovix and QuantumScape, as well as various ETFs that focus on lithium, batteries, and green energy businesses.

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