Novonix Ltd (ASX: NVX) shares have been hit hard on Wednesday after the battery materials company completed a capital raising.
At the time of writing, the Novonix share price is down 19.79% to 19.3 cents after falling as low as 17.5 cents earlier in the session.
The latest decline leaves the ASX battery stock down more than 50% since the start of 2026 and around 54% lower over the past 12 months.
Let's take a closer look at why the stock is being heavily sold off.
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Discounted placement adds more shares
According to the release, Novonix has received firm commitments from institutional and sophisticated investors for a $20.7 million placement.
The new shares will be issued at 16 cents each, representing a 33.3% discount to the company's previous closing price of 24 cents.
The placement price is also 31.2% below the 5-day volume-weighted average price (VWAP) of 23 cents.
Settlement is expected on Friday, with the new shares due to begin trading on Monday.
Novonix is also giving eligible shareholders the chance to buy up to $30,000 worth of shares through a share purchase plan (SPP).
These shares will also be offered at 16 cents each, with the company aiming to raise another $3 million.
The offer is available to investors who were registered shareholders at 7:00pm on Tuesday. It is expected to open next Monday and close on 14 August.
Why are Novonix shares falling?
The large discount attached to the placement appears to be putting most of the pressure on the stock today.
Even after Wednesday's sell-off, the Novonix share price remains around 21% above the 16-cent issue price.
The placement will also increase the number of shares on issue, diluting investors who don't take part in the raising.
Novonix currently has more than 862 million ordinary shares on issue, with the placement adding another sizeable block of stock.
The company plans to use the funds to expand production capacity and prepare for expected customer demand.
Managing Director and CEO Mike O'Kronley said the raising would allow Novonix to continue investing in capacity while supporting its growth plans.
What does Novonix do?
Novonix produces synthetic graphite used in lithium-ion batteries and is building a North American supply chain for battery materials.
The company is expanding its Riverside facility in Tennessee, with the aim of supplying customers across the energy storage, electric vehicle, and industrial markets.
However, increasing production requires a large amount of spending before the company can generate stronger revenue from the facility.
The capital raising gives Novonix more funding to continue the expansion, but the large discounted issue price has added more pressure to existing shareholders.
