I’ve gotten a lot of questions over the past couple days about a “urgent buy alert” from Michael Robinson, who’s teasing his Nexus-9 Network service ($1,250, no refunds) with a pitch about a little $2 stock that’s going to come public in the US sometime soon.

And it comes with all the usual urgency and hoopla, of course…

“This May Be Your One and ONLY Shot!

“Once this tiny stock hits the Nasdaq…

“You could easily make 1,000% before the year’s end.

“But if you don’t act now, you WILL miss out.”

Well, maybe… but the number of folks who’ve made rash investment decisions based on that kind of thinking probably vastly outnumbers the folks who’ve made profits by throwing themselves at the “buy” button in the face of a marketing barrage.

What’s the story? We’re teased that this hot story is urgent (and yes, it’s dated “July 2021”), and it’s a company doing an uplisting on the Nasdaq, or at least a dual listing, and which therefore might reasonably be expected to go up in price.

This is pretty common, it is admittedly true that when a company from a smaller exchange, like Toronto or Australia or Amsterdam, lists its shares in New York, it typically benefits, especially if its in a sector where most of the buying and attention is focused on the US, like technology stocks. That doesn’t mean any old stock from a less-followed exchange will rise in value when it does an IPO in New York, but it’s certainly common to see such stocks “pop” in the US.

Since this is a “known known”, though, it’s also true that sometimes that “pop” comes earlier — if a lot of investors expect the stock to rise because of such pending news, well, sometimes they get that loft under the price before it even completes a US IPO. You can never know for sure until it’s all over.

Which one is Robinson talking up? Well, we get a few clues for you…

It trades at roughly $2 a share. And, probably more importantly, it has something to do with the still-hot electric vehicle (EV) space… here’s a little more from Robinson’s order form:

“… it’s leading the field in what’s becoming the massive, $100 BILLION EV battery component market.

“And by the way, I haven’t even told you the best part yet…

“Because believe it or not, this company’s battery component technology has much broader applications than just electric vehicles.

“The batteries made from these types of components are being used in everything from smartphones and solar panels… to medical equipment and emergency power grids.”

And he names a few of their customers:

“This company has also secured contracts with some of the biggest electronic companies in the WORLD…

“Including:

“Apple… Panasonic… Microsoft… Dyson… Samsung… 3M… LG Chem… And Bosch…..

“… that’s in addition to the existing multiyear deals they already have with EV automakers Tesla, Ford, Honda, Toyota, GM, and Volkswagen.”

Sounds exciting, no? In the little “urgent” cell phone video he records he also includes a one-year candlestick chart for this stock, though the chart seems to end on about May 1. It shows a stock that rose 1,147%, from under 50 cents in early 2020 to a peak of $4 and change earlier this year and a current price of about $2.50 or so.

So what is it? Well, thanks in part to the little chart that Robinson shows us in his video, the Thinkolator can confirm that Robinson is teasing a stock that has gotten the hot and heavy teaser push before from a different editor, this is the battery materials and testing company Novonix, teased by Ray Blanco a couple times over the past year because of their connection with Tesla.

And yes, Novonix is listed in Australia at NVX, though a substantial portion of the trading volume over the past year has been on the US OTC markets at ticker NVNXF… and they are trying to capitalize on that US interest, and on the surge in interest in batteries in recent years, by doing an IPO on the Nasdaq.

That doesn’t mean Novonix will be trading in NY next week, there’s not yet been any confirmation that they’ll be able to make this happen — they did announce in early May that they are exploring a Nasdaq listing and have submitted a “draft registration statement” to the SEC, but not much detail is public yet. Here’s the language from their press release:

“NOVONIX has submitted a draft registration statement, on a confidential basis, to the U.S. Securities and Exchange Commission (the “SEC”) in connection with a potential initial public offering in the United States of American Depositary Shares1 (“ADSs”), and concurrent listing of the ADSs on Nasdaq. Each ADS would represent a certain number of fully paid ordinary shares of NOVONIX.

“The number of ADSs that may be offered, the number of underlying NOVONIX ordinary shares that may be issued, the price for such instruments and the timing of the offering have not yet been determined. Any offering is subject to the outcome of the SEC review process, market conditions, investor demand and NOVONIX shareholder approval.

“No final decision has been made in respect of the Nasdaq listing and there can be no assurance as to the occurrence, timing and/or completion of such a listing. Following any Nasdaq listing, NOVONIX ordinary shares would continue to trade on the ASX.”

Novonix shares closed at A$2.61, which would be roughly US$1.91, and despite falling a bit today in both Australia and the US that’s still a few cents worth of premium pricing for the US OTC shares (which are around $1.95 at the moment). That’s not terribly unusual, US and Canadian stocks typically trade much closer to lockstep, but the US and Australian markets are never open at the same time so there’s no easy arbitrage for market makers to do to help the trading stay even. The same thing is true of stocks where the primary pricing is done in Hong Kong, there’s always a little friction if you’re trading during US market hours, and it’s pretty typical that buyers have to overpay a little (and in a falling market, sellers have to accept less than “fair” prices sometimes — keep in mind that these kinds of OTC-traded foreign stocks are almost always easier to buy than to sell).

So what’s going on? Well, there’s no sense trying to game the timeline of SEC approval or a US listing, we’ve gotten no further news on that and we don’t know whether the SEC is grilling them for more info, telling them to wait a couple years and come back, or preparing to give them the green light tomorrow. We’ll find out when we find out.

Which means that unless you just want to place a bet on “more attention” for Novonix, you’re probably better off assuming that it will continue to be listed in Australia, and making an investment decision on the merits.

That task is challenging enough, because this is essentially an R&D company. They do have a meaningful testing business, which is where most of those names come from in the “name drop” section of their investor presentation (and in Robinson’s hinted list of clients), but the thing that investors are more excited about, their work on new synthetic graphite anodes for batteries, is not really a commercial business just yet. They do have some funding for their “phase 1 expansion” of their new anodes in the US, including some grant funding from the government, but though it’s big enough to be meaningful in the next year or two that will really still be a test project to prove up the technology and begin pitching some larger customers on the potential.

Graphite is a major part of the battery business, since it is used for the anode material in almost every kind of lithium battery chemistry, and Novonix actually used to be thought of as a junior graphite miner hopeful many years ago, on the strength of their Mt. Dromedary graphite deposit. I don’t remember whether they ended up selling off that project or it’s just currently being ignored, but it doesn’t feature in Novonix’s plans at the moment — they’re all about building up their synthetic graphite anode business, and presumably using their base of battery testing customers to try to make sales connection for these new anodes… and also continuing to develop new battery materials and technologies, largely through their research sponsorship of the Dalhousie University battery lab that originally created Novonix (Novonix was spun out of a research project at Dalhousie in 2013). That lab has been working with both Tesla and Novonix on new battery materials under Dr. Jeff Dahn, who also, a couple weeks before that contract was renewed for five years, signed on to be Chief Scientific Advisor at Novonix (he’s also still working with Tesla, which is the connection Ray Blanco was trying to turn into a commercialization deal and a Tesla endorsement of Novonix last year).

That next-generation work at the Dalhousie University lab is not what is likely to move the revenue needle anytime soon, but there’s plenty of hope that they might eventually turn their patents in new anode technologies or other battery materials into a real business in Nova Scotia. The larger scale for now, and the real potential for revenue in the next few years, is in Tennessee, where Novonix has the PUREgraphite anode plant in Chattanooga that’s “ramping up” to supply 2,000 tons/year of synthetic graphite for battery anodes.

That’s mostly going to Samsung at first, they’ve got the initial order for 500 tons, but Novonix also has a non-binding agreement with Sanyo/Panasonic to evaluate the production for possible use. There are a wide variety of price quotes for synthetic graphite, and nobody’s talking about what Samsung will pay, but if we assume a pretty high-end price of $20,000/ton (I don’t know if that’s rational or not, I’ve just seen the number used), perhaps that could bring in as much as $10 million from the Samsung deal and $40 million in annual revenue when the plant reaches capacity. That would still be very small, and an inconsequential part of the global graphite anode business (which consumes roughly 400,000 tons/year)… but Novonix is currently almost entirely an R&D operation, with just a couple million dollars in revenue from their battery testing business, so that would still be a big deal. I should note that they’re also at a US$800 million market cap in anticipation of the value of this pilot project and their future possibilities beyond that in other battery materials and designs, so it’s a small company but not really an unknown microcap — even a huge success from this initial plant would mean they’re already trading at an optimistic and future-focused valuation.

The two likeliest catalysts for further excitement in the stock are presumably that Samsung supply deal, which ought to bring the first little burst of revenue for Novonix when the materials begin to be delivered (probably later this year, it’s been delayed about a year from the original October 2020 target), and the possibility of a US IPO. It’s an interesting company and either of those things or a burst of attention (like from Michael Robinson lately, or from Ray Blanco in months past) could certainly have an impact on the share price, but if I were to wager on this one I’d keep it small and try to ignore it for a few years while we wait and see how the technology plays out. There’s no magic valuation number that makes obvious sense to me, there are too many unknowns.

That’s just me, though, and I haven’t invested in this company, which means it’s not my money we’re talking about — it’s yours. So go forth, researchify, and let us know what you’re doing with your money. Is Novonix worth a gamble because of the possibility of a US listing? Think the technology is interesting enough to bet on the potential beyond that? Prefer to wait and see a little revenue before you place your bets? Have other favorite battery technologies that you think will outpace these Novonix anodes and whatever other tech comes out of the Dalhousie University lab? Let us know with a comment below.

P.S. Don’t get your hopes up about that 1,147% return — yes, stocks that get a dual listing often pop a bit, but there’s not much chance they’ll pop to that degree… if Novonix rises that much, it would be hitting a valuation of nearly $10 billion. A few years ago I would have said that was impossible, though I guess the speculative fervor surrounding Quantumscape (QS) means I should step back and say “improbable” (no, the two aren’t comparable… but they are both battery “stories” built, at least in part, on hopes for future commercial breakthroughs).