Why Enovix Fell More Than 11% on Friday
Shares of Enovix Corporation (NASDAQ: ENVX) ended Friday's session down by 11.2%, according to data from S&P Global Market Intelligence, ending a volatile but otherwise bullish week on a low note. Investors are struggling to value the lithium battery manufacturer against a backdrop of soaring lithium prices.
Don't look for a specific headline to explain Enovix's sharp sell-off on Friday. You won't find one. At the same time, don't look for news that justifies this week's test of new 52-week highs: You won't find one specifically prompting that move either. Rather, this ticker's sizable run-up from July's low and extreme volatility since early August largely reflects lithium's skyrocketing prices. It's prompting the stock's recent buyers to rethink their purchase...again.
Lithium is the metal used in batteries for electronics like cellphones and laptops. Most notably, significant quantities of lithium are needed for the batteries that power electric vehicles (EV). The rapid growth of EV usage has strained supply chains, with shortages expected for the foreseeable future. While consumers can tolerate a fair number of price hikes, with lithium reaching record highs just this week (and with no end to the pressure in sight), the market isn't entirely sure how to evaluate related companies' futures; customers may finally balk.
Source Fool.com
