A major shareholder sold off most of its Novonix shares last week. What’s happening?

Novonix Ltd (ASX: NVX) shares are under pressure on Wednesday.

In afternoon trade, the battery materials and technology company’s shares are down 2% to $2.70.

Why is the Novonix share price falling?

The Novonix share price appears to be struggling with general weakness in the battery materials space today.

This has seen the likes of Core Lithium Ltd (ASX: CXO) and Pilbara Minerals Ltd (ASX: PLS) lose 3% of their value this afternoon.

In addition, recent selling by one of its largest shareholders and former director could be weighing on sentiment.

According to a ceasing to be a substantial holder notice, St Baker Energy sold 25 million shares for $68.125 million last week. That sale was made a few days after the massive jump in the Novonix share price after the company was selected to for a US$150 million grant from the United States Department of Energy.

Following the sale, St Baker Energy is no longer classed as a substantial shareholder because its holding has dropped beneath the 5% mark. This is a big reduction from its 18.1% stake back in May.

Should investors be concerned about this sale?

Shareholders may have a right to be concerned with this sale as the owner of St Baker Energy, former director Trevor St Baker AO, spoke glowingly about the company’s future and his investment after retiring from the board in May. At the time he said:

I am really very pleased to have been able to contribute as a Director of NOVONIX in its exciting establishment as such an important player in the decarbonisation transformation of global energy and transport businesses.

I am also excited about the Company’s continuing growth as a significant battery material and energy storage solution provider as these sectors grow to serve these transformations, and my resignation should not reflect any diminution of interest by SBEIF or of the St Baker family in NOVONIX as a serious growth stock in our investment portfolios.

No reason was given for this latest sale, leaving shareholders to figure out what has changed since then.

Should you invest?

The team at Morgans sees value in the Novonix share price. Though, they warn that it would be a high risk investment.

The broker currently has a speculative buy rating and $3.11 price target on its shares. This implies almost 15% upside for Novonix shares from current levels.

The post A major shareholder sold off most of its Novonix shares last week. What’s happening? appeared first on The Motley Fool Australia.

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More reading

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• Why Life360, Novonix, Pilbara Minerals, and Vulcan shares are storming higher today

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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