Enovix Stock Is Sliding Tuesday: What's Going On?

Enovix Corp ENVX shares are trading lower Tuesday after the company announced a strategic realignment of its Fab1 facility and said third-quarter production fell short of guidance. 

What Happened: Enovix announced that it will transition its Fab1 facility from a manufacturing plant to a "center for innovation" focused on product development. 

The silicon battery company will also cut its workforce at the factory by about 185 people. The restructuring is expected to be completed in the fourth quarter and result in annualized savings of around $22 million. In the short term, the shift caused Enovix to fall short of its production guidance of 36,000 small cell units. The company said it will only produce 24,000 units in the third quarter. 

"We do not take these decisions lightly and after careful consideration we determined these changes are necessary to set the company up for long-term success," said Raj Talluri, president and CEO of Enovix.

"It has become clear that Fremont is best positioned to be our Center for Innovation complementing our high-volume manufacturing in Asia."

Enovix anticipates total restructuring charges of approximately $2.5 million primarily in the third quarter. The company also expects to recognize accelerated depreciation expenses of around $36 million for equipment between the fourth quarter of this year and the first quarter of 2024. 

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ENVX Price Action: Enovix shares were down 6.77% at $10.94 at the time of publication, according to Benzinga Pro.

Photo: 3844328 from Pixabay.