Enovix Corporation (ENVX) Misled Investors Regarding its Ability for Production and Profitability
A shareholder filed a class action on behalf of all investors who purchased or otherwise acquired Enovix Corporation (NASDAQ: ENVX) common stock between February 22, 2021 and January 3, 2023, for violations of the Securities Exchange Act of 1934. Enovix purports to design, develop, and manufacture silicon-anode lithium-ion batteries using proprietary 3D cell architecture, which the Company claims allows its batteries to achieve higher energy density.
According to the complaint, on February 22, 2021, Enovix announced plans to become a publicly traded company. On July 14, 2021, Enovix was officially acquired by Rodgers Silicon Valley Acquisition Corp., which then changed its name to Enovix Corporation. Shares of Enovix began trading on July 15, 2021.
During the class period, defendants touted that Enovix Company’s ability to “deliver at scale due to its proprietary 3D cell architecture, world-class team and automated manufacturing.” Indeed, by March 2022, defendants claimed the Company had a $1.5 billion “revenue funnel” that it could tap into as soon as it could produce to scale. However, defendants failed to disclose material adverse facts about Enovix’s ability to manufacture its proprietary battery technology.
On November 1, 2022, Enovix announced its financial results for the third quarter of 2022, revealing it realized just $8,000 in revenue. Moreover, it revealed that it would be “dialing back” its work on improving the Gen1 lines in favor of shifting its focus to its future Gen2 lines because the supposed improvements were not having the desired results on output. Consequently, Enovix “anticipate[d] achieving lower overall output from Fab-1 in 2023.” In fact, Enovix revealed it anticipated producing fewer than one million batteries in 2023. On this news, Enovix’s share price fell 44%, from a close of $18.87 per share on October 31, 2022, to $10.53 per share on November 2, 2022.
Then, on November 7, 2022, Enovix announced that defendant Rodgers would assume the role of Executive Chairman. In a statement released that day, Rodgers criticized his own company for a “lack of clear and transparent investor communications” and conceded: “We have poorly communicated on the status of Fab-1.”
Finally, on January 3, 2023, Rodgers held a special presentation for investors. On the call, Rodgers revealed that Enovix Company’s second production facility and Gen2 lines would be delayed by several additional months because of the equipment failures experienced in the Fab-1 lines. On this news, Enovix’s share price dropped 41% to close at $7.15 per share on January 4, 2023.
What’s Next: Similarly situated shareholders may be eligible to participate in the class action against Enovix Corporation. Shareholders who want to act as lead plaintiff for the class must file their papers by March 7, 2023. A lead plaintiff is a representative party acting on behalf of other class members in directing the litigation. You do not have to participate in the case to be eligible for a recovery.
All representation is on a contingency fee basis. Shareholders pay no fees or expenses.
