Magnis (ASX:MNS) share price slips after retracting $10b ‘potential’ valuation

Shares in the lithium-ion battery manufacturer are down today

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Shares in lithium-ion battery manufacturer Magnis Energy Technologies Ltd (ASX: MNS) are losing charge today, currently trading down 1.8% at 55 cents apiece.

It’s been a rollercoaster ride for the company the last few weeks, with the Magnis share price closing as high as 73 cents and trading as low as 44 cents – a 64% spread – before smoothing off again to its current levels.

Towards the end of trade yesterday, Magnis advised it had been in talks with the ASX and had subsequently removed material from the corporate presentation of its annual general meeting (AGM).

What did Magnis announce?

Magnis Energy released its 2021 AGM presentation on 22 November, which included details of several investment highlights of its lithium-ion battery plant in New York, Imperium3 (IM3NY). Slide 18 of the presentation contained information about “the potential future value of the company”, as Magnis put it.

Magnis concluded it was potentially worth $10 billion by conducting a “sum of the parts comparable valuation”, suggesting its battery manufacturing business was worth $4 billion alone. Meanwhile, it slapped an easy $4 billion potential value for its anode materials business.

Using comparable names such as Novonix Limited (ASX: NVX), Magnis sized up its “equivalent” divisions to the heavyweights and even weighed IM3NY up against the $300 billion market capitalisation CATL Co Ltd.

Following consultation with the ASX, the company retracted the material on page 18 yesterday and informed investors that they “should not rely on that information as the basis for any investment decision”.

In the news again

This isn’t the first time the battery manufacturer has had to clear the air for shareholders. It was only last month that Magnis responded to a ‘please explain’ letter from the ASX.

The company was asked to clarify updates made in May and September, that listed Indian utility company Sukh Energy as a key stakeholder. The ASX asked Magnis to front up about Sukh’s operations as a going concern.

Magnis Energy replied it was well aware of Sukh Energy’s business operations, its key customers, and its financial health.

The company has also had to clarify statements made on its Imperium3 business and was also warned by the ASX back in July about the use of “exuberant language” in its announcements to investors.

Separately, the regulator also uncovered a potential pump and dump scheme on Magnis’ share price in a Telegram group. As a result, 400 traders from the group were subsequently warned by ASIC.

The announcement follows a disputed report that Magnis chair Frank Poullas was being investigated by the Australian Securities and Investments Commission (ASIC).

Despite the turbulence lately, the Magnis share price is still up 44.7% in the past month and has soared more than 206% in the last year.

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The author has no positions 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 Bruce Jackson.

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