The Magnis (ASX:MNS) share price has climbed 5% this week. What's been happening?

Shares in the battery manufacturer are fluctuating. Here are the details.

| More on:
A male executive worker wearing glasses and a blue collared shirt looks at his laptop screen with a concerned look on his face and his hand to his forehead as he watches his screen.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Key points

  • The Magnis share price has increased by 5% in a week, although it finished in the red today
  • The chairman of the battery producer is reported to be under investigation by ASIC
  • Magnis shares have increased by 65% in the last 12 months

The Magnis Energy Technologies Ltd (ASX: MNS) share price has shot up this week.

The price movement comes as the financial activity of the company's chairman continues to be investigated by the Australian Securities and Investments Commission (ASIC).

At the market close, the Magnis share price had dropped by 5.49% to 43 cents. However, it is still up 4.87% from last Friday's closing price.

So, what's going on with the battery manufacturer?

Magnis chairman under investigation

As reported by The Australian on Tuesday, ASIC has requested documents pertaining to the trading activity of Magnis chairman Frank Poullas.

According to The Australian, letters sent to Magnis by senior ASIC officials in September, seen by the publication, "show the corporate regulator is investigating suspected contraventions of Corporations Act provisions relating to market manipulation and the false trading of shares".

Information tying the company with "Dubai-based financiers" has also been requested.

Further, The Australian said:

The regulator has separately warned investors who appear to be using Telegram and other messaging platforms to manipulate the Magnis share price that they face prosecution.

This comes after the company last month announced the Imperium3 lithium-ion battery plant in New York — of which Magnis is the major shareholder — was now 57% complete.

The long-delated project had been expected to start production in 2019.

Chairman's financial activity in question

The financial activity of the chairman is also under question after a number of payments from Magnis were made to Strong Solutions — a company linked to Poullas.

The Australian said an internal report, handed to Poullas in early 2020, showed Strong Solutions was billing Magnis $4,500 a month.

The report noted Poullas was charging Magnis his consulting fee with "no independent oversight of this fee or oversight of work undertaken".

Magnis responds to media coverage

In mid-November, Magnis entered a trading halt before responding to an article in The Australian that claimed Poullas was under investigation by ASIC.

In its response, the company said the article had "a number of unsubstantiated statements regarding the Company".

The Magnis share price fell by more than 19% on the day of the response. Since then, two board members have also jumped ship from the company.

Magnis share price snapshot

In the last 12 months, the Magnis share price has increased by 65%. Within that time, shares dropped as low as 26 cents and shot as high as 76 cents. Its shares are down 25% this year to date.

The company has a market capitalisation of $439.42 million.

Motley Fool contributor Alice de Bruin 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 Bruce Jackson.

More on Materials Shares

a mine worker holds his phone in one hand and a tablet in the other as he stands in front of heavy machinery at a mine site.
Materials Shares

Is Core Lithium stock a good long-term investment?

Is this lithium dog a buy-the-dip opportunity today?

Read more »

Man in mining hat with fists raised and eyes closed looking happy and excited about the Newcrest share price
Materials Shares

Guess which ASX small cap mining stock is rocketing 32% today

This mining stock is being given a major cash injection from the government.

Read more »

A man sits in a chair hunched over a laptop and covered head to toe in frozen icicles to represent Envirosuite's trading halt
Materials Shares

Here's why this ASX lithium stock is in a trading halt

Bad news or good news. What is the dealio with government permitting?

Read more »

A cool young man walking in a laneway holding a takeaway coffee in one hand and his phone in the other reacts with surprise as he reads the latest news on his mobile phone
Materials Shares

Lynas shares leap as Rinehart ramps up $332 million stake

Gina Rinehart is gradually growing a rare earths empire.

Read more »

Two miners standing together with a smile on their faces.
Materials Shares

Rio Tinto share price drops after Q1 update falls short of expectations

How did the miner perform compared to expectations?

Read more »

two men in hard hats and high visibility jackets look together at a laptop screen that one of the men in holding at a mine site.
Materials Shares

Own Rio Tinto shares? Here's your quarterly update preview

What is the market expecting from this mining giant?

Read more »

A young woman lifts her red glasses with one hand as she takes a closer look at news about interest rates rising and one expert's surprising recommendation as to which ASX shares to buy
Materials Shares

Why is this ASX lithium stock rocketing 32% today?

Investors are cheering on a big announcement.

Read more »

A couple sits on a sofa, each clutching their heads in horror and disbelief, while looking at a laptop screen.
Materials Shares

These ASX lithium stocks could crash 20% to 40%

Analysts are feeling bearish about these lithium stocks.

Read more »