Why are Magnis shares in a trading halt?

This battery materials share is missing out on another positive session.

| More on:
A man casually dressed looks to the side in a pensive, thoughtful manner with one hand under his chin, holding a mobile phone in his hand while thinking about something.

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

Magnis Energy Technologies Ltd (ASX: MNS) shares won't be going anywhere again on Friday.

That's because this vertically integrated lithium-ion battery technology and materials company's shares have been in a trading halt since yesterday.

This has been particularly bad timing for Magnis shares, which have missed out on the All Ordinaries index (ASX: XAO) rising over 2% since requesting a halt.

This is made all the more worse when you consider how poorly its shares have performed of late.

Since the turn of the year, the Magnis share price has lost over 60% of its value.

Why are Magnis shares in a trading halt?

Magnis requested the trading halt on Thursday to allow it "the time it needs to finalise documentation and the disclosure in relation to a proposed material fund raising."

The release reveals that the company has requested that the trading halt continues until the earlier of the fund raising announcement and the commencement of trade on Monday.

At this stage, it is unclear how much Magnis is seeking to raise from the fund raising and how exactly it plans to go about raising the funds.

However, unfortunately for its shareholders, if it is a capital raising, it is likely to be dilutive and put further pressure on Magnis shares.

Were the company to raise the funds at a 15% discount, this would mean 12.35 cents per new share. This is a fraction off a multi-year low, which demonstrates just how dire things have got for the company recently.

It is also worth noting that the company's CEO announced his resignation last month and no replacement has been found thus far. These are hardly ideal times to be raising funds.

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.

More on Materials Shares

Two young African mine workers wearing protective wear are discussing coal quality while on site at a coal mine.
Materials Shares

South32 share price jumps on $2.5b coal sale

This mining giant is offloading its coal assets in Illawarra.

Read more »

A happy businessman pointing up, inidicating a rise in share price
Materials Shares

Why are ASX lithium shares like Liontown having such a bumper session today?

Lithium shares are defying the broader market on Wednesday.

Read more »

A man has a surprised and relieved expression on his face. as he raises his hands up to his face in response to the high fluctuations in the Galileo share price today
Materials Shares

Why is the Chalice Mining share price rocketing 20% today?

Shareholders have a reason to smile at long last on Wednesday.

Read more »

A man holds his head in his hands, despairing at the bad result he's reading on his computer.
Materials Shares

Why are Core Lithium shares taking another tumble on Wednesday?

It doesn't look like mining operations will be resuming any time soon.

Read more »

Three miners looking at a tablet.
Broker Notes

Should you buy Pilbara Minerals shares today?

We canvas the experts' views on this ASX lithium stock following last week's FY24 half-yearly report.

Read more »

Two businesspeople walk together in an office, smiling as they enjoy a good business relationship.
Materials Shares

4 directors are buying the dip on this ASX lithium stock

Insiders have been busy buying shares in this lithium miner.

Read more »

A man sees some good news on his phone and gives a little cheer.
Earnings Results

Lynas share price charges higher despite 74% half-year profit decline

Weak rare earths prices have weighed heavily on the company's profits.

Read more »

A team of people giving the thumbs up sign representing APA and Wesfarmers doing a deal to study green hydrogen transport using an APA gas pipeline
Materials Shares

Why ASX 200 investors remain upbeat on Pilbara Minerals shares

Pilbara Minerals has some unique advantages over many rival ASX lithium miners.

Read more »