The Novonix Ltd (ASX: NVX) share price is bucking its lengthy losing streak.
Finally.
Shares in the battery technology company are up 3.9% to $1.97 at the time of writing, having earlier posted gains of more than 5%.
Yesterday, the Novonix share price closed up 9.2% after hitting new 52-week lows on Monday.
Here's what ASX investors are mulling over.
Image source: Getty Images
What are ASX investors considering?
The Novonix share price has come under major selling pressure in 2022, down a painful 82% despite the past two days of gains.
Investors sold off the company as both domestic and global interest rates rapidly took off from their historic lows at the beginning of 2022 to combat fast-rising inflation.
Higher interest rates are bad news for equities in general, but particularly onerous to loss-making companies reliant on debt to fund their future growth and profitability plans. As rates run higher, the cost of those future earnings becomes dearer.
And the Novonix share price took a hit after the company reported a big leap in its net loss for FY22. That came in at $71 million compared to a net loss of $18 million in FY21.
Novonix ended the financial year with a cash balance of $207 million. But management said that won't be enough to fund its expansion plans, saying those plans will "involve significant capital expenditure, and additional funding beyond the existing cash balance at 30 June 2022 will be required".
Novonix shares look to be rebounding over the past two days following a dovish shift from the Reserve Bank of Australia (RBA). The RBA opted to raise rates by a modest 0.25% rather than the 0.50% hike markets had widely priced in. Good news, for loss-making stocks.
Novonix share price snapshot
The 82% loss posted by the Novonix share price so far in 2022 offers a dramatic contrast to the price movement in 2021.
2021, of course, was a year when the official cash rate in Australia stood at the historic low of 0.10%. A year when the RBA also told ASX investors they could expect rates to remain at rock bottom levels, likely through 2024.
With record low funding costs in mind, the Novonix share price rocketed an eye-popping 904% from the closing bell on 31 December 2020 through to 2 December 2021, when it hit $12.15 per share.
