I suppose you guys wouldn’t mind signing up to my newsletters about Enovix and my other miscellaneous findings. I’m not expecting a response from these newsletters. I just want to share my findings and things that I see. If these newsletters end up being too much for you, just let me know and I won’t send them to you anymore. No hurt feelings, no questions asked.
With that out of the way, let’s begin!
Full disclosure:I currently own 24000 shares of RSVAU. It comprises a substantial part of my investment portfolio. These newsletters contain my market moves and interests. I am not anyone’s financial advisor. You make all of your own choices regarding your portfolio. My actions may be wrong and, if taken, may subject you to financial loss. Proceed at your own risk.
My Enovix actions going forward:
Current RSVAU share price: $18
Support price: $22 (buy all shares up to the $22 price point)
Current sentiment:
Short term bullish – Next month
Mid term bearish – Between next month and ticker change
Long term extremely bullish – Post lockup period
Stocks to watch:
THCB – This is another SPAC that is merging with Microvast, a battery EV supplier working with mass transit. They are a post-revenue company. Microvast recently inked a deal with Oshkosh Truck to make postal service truck batteries.
RMO – Romeo Power doesn’t create the batteries directly. Instead, they work on battery packing, modules, and battery management systems for commercial fleets for better management of battery life/failure and maintenance. They just inked a deal with Ecellix (Romeo Power, Ecellix to partner on development of next-gen battery technology for commercial vehicles – Green Car Congress) to use their silicon battery anode. I have not done much research on Ecellix to determine if their process is better than Enovix.
QS – Quantumscape is a pre-revenue company that is trying to develop a solid state battery for EVs. One of its major backers is Bill Gates, which garners the company a lot of hype.
Things to prepare for:
Warrant redemption: A cash exercise will cost $11.50/warrant. Make sure to have this amount saved for a cash exercise. Personally, I would recommend doing a cash exercise on any post-tax accounts (brokerage, roth IRA), and cashless exercise on pre-tax accounts (traditional IRA, traditional 401k). If you do a cash exercise on a pre-tax account, you subject yourself to double taxation as this “contribution” would not be deductible on tax returns.
Lockup period: According to the super 8K (SEC Filings :: Rodgers Silicon Valley Acquisition Corp. (RSVAU) (rodgerscap.com)) in exhibit 10.6, it looks like there will be a lockup agreement. This means there should be a big selloff of the stock approximately 30 days out from the lockup period. I will be selling my shares 30 days from the lockup period and re-buying back in about a week before the lockup period.
Fully paid lending securities: Fidelity offers a fully paid lending program (Fully paid lending | Lend securities and earn income | Fidelity) which allows you to lend your shares to short sellers and make profit off of their margin interest. Given that there will be relatively few shares available for ENVX (after ticker change), sounds like a great way to make money here. I signed up for this with my Roth IRA. I was not able to sign up for this with my 401k or HSA because they’re ineligible. I am not using this on my taxable brokerage account as the interest counts as a short term capital gain.
Long term market sentiment:
Very, very bullish. Here are the items which are making me bullish:
Greg Reichow is on the board – He used to work at Tesla for their operations division and was a key player in getting the Gigafactory set up. He was brought onto the board in December. I think Enovix’s ultimate goal is to get into Tesla.
Joint venture opportunities – To my knowledge, no one in the market has a mature platform like Enovix does. Once they begin doing joint ventures in 2025 and license their product to other battery suppliers, they will have a stranglehold on the market.
Risks:
Quantumscape could develop a solid state battery. But even if they do, then they have to commercialize it and produce mass market batteries for EVs. Being able to produce one is different than being able to produce one at scale. If QS is able to develop a battery, it could be a negative headwind for ENVX.
Battery fabrication slowdown – According to previous PRNewsWire article here: Enovix Secures $45 Million from Investors and Customers to Produce and Commercialize its 3D Silicon™ Lithium-ion Battery (prnewswire.com) – ENVX was slated to begin producing batteries in late 2020, but their investor presentation shows they’re only going to begin customer qualification this summer. Looks like they’re working hard but they had some battery fab slowdowns.
Anyway, just some of my thoughts. I’ll be sending out random newsletters as I see new information come out.