NVX Chart, page-1849

This week ASX-listed battery technology business Novonix reached a record-high market cap of $6 billion on revenue of $1.6 million for the quarter ending September 30.

Over the quarter Novonix spent just $906,000 on research and development, with $1.5 million spent on product and operating costs.

Its shares are up 2890 per cent over the past five years and Novonix has issued equity to leave it with $248.8 million cash on hand as at September 30. In August, US group Phillips 66 took a 16 per cent stake via a $US150 million investment for 77.96 million shares. That works out around an FX-adjusted $2.70 per share, versus this week’s peak of $12.25.

There are dozens, or perhaps hundreds of other lithium or green-focused businesses that will rely on positive sentiment and announcements (rather than cashflows) to justify staggering valuations over the next 12 months.

Lake Resources, Liontown Resources, Core Lithium, Arizona Lithium, Sayona Mining and short seller target Vulcan Resources have commonly soared 500 per cent to 1000 per cent over the past 12-24 months thanks to exciting stories, a green premium, and expectations for rising lithium prices.

In reality bubbles often don’t pop, but deflate as momentum reverses and speculators using a mixture of technical signals and guesswork sell shares based on recent trends. Whether the green stocks’ valuations prove justified on fundamentals or a bubble deflates remains to be seen.

Part of the article from the AFR