Enovix shorts (ENVX), mcap=$1770m

ENVX short pitch:
– A largely pre-revenue battery tech company that unequivocally admits things are going poorly.
– Equity is worth a small fraction of today’s trading price.
– The company is burning cash and does not yet have the necessary capital to reach operational scale.
– Years behind schedule, massively over budget, and still does not generate any meaningful commercial revenue.
– Its first plant (Fab 1) is now expected to operate at <0.5%(!) of its initial forecast.
– Capital raise is required for the second plan.
– Battery tech is a highly competitive industry and ENVX technology is not unusually novel.
– Its manufacturing process remains unproven.
– The founding CEO was just fired and replaced.
– Odds of a successful turnaround are slim to none.

ENVX valuation:

– In an optimistic case of a successful turnaround shares are worth only $2.85.
– Current price implies ENVX is able to reach the scale of Varta and then trade at 15x EBITDA multiple.

Exp. gain: 70%+

Full write-up (free guest account required):

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