What's Going On With Enovix (ENVX) Stock Tuesday?

Shares of Enovix Corp ENVX are trading higher Tuesday morning. The high-performance battery company issued new guidance regarding its upcoming warrant dividend distribution.

What To Know: The company released a supplemental Frequently Asked Question document to address logistical and eligibility concerns from shareholders and brokers ahead of the July 17, record date.

A key point of clarification involves shareholders who hold ENVX stock in margin accounts. Enovix CFO Ryan Benton warned that brokerage practices like securities lending could prevent these investors from receiving their warrants unless they take proactive steps. The company is urging shareholders to contact their brokers directly to confirm their account status and ensure eligibility for the distribution.

Under the terms, stockholders will receive one warrant for every seven shares of common stock held. The warrants will expire on October 1, 2026, unless an early expiration condition is met.

This condition is triggered if the stock’s volume-weighted average price equals or exceeds $10.50 for twenty out of any thirty consecutive trading days.

What Else: Enovix stock is likely rising primarily because its new guidance on the upcoming warrant dividend is creating a potential short squeeze dynamic. The company clarified that shareholders with margin accounts must recall any loaned-out shares to be eligible for the warrants as of the July 17 record date.

This action forces short sellers, who had borrowed those shares, to buy them back on the open market to cover their positions. According to data from Benzinga Pro, Enovix has a very high short interest, with 44.609 million shares sold short, which represents a significant 31.16% of its publicly available float.

The resulting surge in buying demand is the main force lifting the stock price, likely amplified by new investors purchasing shares to receive the dividend and by the perception that the warrant issuance is a bullish signal of management’s confidence.

Benzinga Edge Rankings: According to Benzinga Edge stock rankings for Enovix, the company displays moderate positive momentum with a score of 56.94 out of 100. However, the stock is flagged as being highly overvalued, earning a very low Value score of just 4.71.

Price Action: According to data from Benzinga Pro, ENVX shares are trading higher by 5.9% to $15.52 Tuesday morning. The stock has a 52-week high of $18.68 and a 52-week low of $5.27.

Read Also: 5 Hot Stocks With Summer Buybacks You Can Cash In On

How To Buy ENVX Stock

By now you're likely curious about how to participate in the market for Enovix – be it to purchase shares, or even attempt to bet against the company.

Buying shares is typically done through a brokerage account. You can find a list of possible trading platforms here. Many will allow you to buy “fractional shares,” which allows you to own portions of stock without buying an entire share.

In the case of Enovix, which is trading at $15.38 as of publishing time, $100 would buy you 6.5 shares of stock.

If you're looking to bet against a company, the process is more complex. You'll need access to an options trading platform, or a broker who will allow you to “go short” a share of stock by lending you the shares to sell. The process of shorting a stock can be found at this resource. Otherwise, if your broker allows you to trade options, you can either buy a put option, or sell a call option at a strike price above where shares are currently trading – either way it allows you to profit off of the share price decline.

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