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Novonix explains that curious share spike before US funds deal

The ASX has asked Novonix to explain why its share price rocketed almost 20 per cent in the days before it announced a $US150 million grant from the US Government.

Oct 21, 2022, updated Oct 21, 2022
The Novonix team, with Chris Burns (centre) outside the Nasdaq

The Novonix team, with Chris Burns (centre) outside the Nasdaq

The company’s shares have always been subject to the news cycle, but Novonix revealed it knew about the possible grant from the US Government on October 14, six days before it made the announcement.

Under Australia’s continuous disclosure laws, a company must reveal material information as soon as the board has been made aware of it.

“On October 14, Novonix was advised by the Department of Energy that it had been selected to enter negotiations to receive grant funding,” the company said.

But it added that the grant was, at that time, subject to negotiations and the execution of an agreement and was considered by the company to be incomplete.

It was also prohibited by the DOE from disclosing the negotiations at the risk of losing the opportunity.

The company’s shares were trading below $1.80 on Monday this week and started climbing strongly on Tuesday. The ASX asked why Novonix shares were not put into a trading halt in light of the 20 per cent rise.

“It was publicly known that the DOE was going to announce the successful applicants for the grant funding before the mid-term elections in the USA and, most likely, in the first two weeks of October and Novonix was considered a logical candidate for the grant funding given the nature and the profile of the company,” it said.

The company said there was some speculation that it may be selected to enter negotiations for grant funding with the DOE but it was not aware of any sources of information which referred to specific details about the grant.

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“Novonix noted the increase in NVX trading volume and prices over the course of October 18 and despite the fact that NVX believed confidentiality in the information had not been lost, NVX decided that it would be prudent to go into a trading halt from October 19 in order to manage the continuous disclosure obligations until such time as it was in a position to announce the information.”

The information was then released by the DOE at 1am (Australian time) on October 20.

 

 

 

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