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Microvast (MVST) stock falls on larger loss

By Monte Stewart


Microvast head office
Microvast blames legacy product costs for part of the loss – Photo: Microvast

US electric-vehicle battery maker Microvast’s stock price dropped more than 5% in after-hours trading Monday after the company reported far greater losses than expected.

Stafford, Texas-based Microvast posted a net loss of $116m (about 102m) in the third quarter, up more than tenfold from a loss of $10.1m a year earlier, the company said in its quarterly earnings report.

Losses per share were more than double those from a year earlier at $0.49. Analysts polled by Dow Jones had expected an adjusted per-share loss of $0.04.

Company cites legacy-product costs

The firm blamed a $34.1m one-time product warranty accrual and a $6.6m inventory write-down – both related to legacy products, the company said – as well as increased raw-material prices and a $2.3m share-based compensation expense accrued following a merger in July with special-purpose acquisition company Tuscan Holdings.

The merger enabled Microvast to go public. 

The widening loss contrasted with a 19.8% year-over-year revenue increase to $36.9bn from $30.8bn. Microvast attributed the revenue boost to increased battery sales to new and existing customers.


40,035.30 Price
+0.910% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 22:00 (UTC)
Spread 106.00


2,196.80 Price
+1.030% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 22:00 (UTC)
Spread 6.00


1.09 Price
+0.090% 1D Chg, %
Long position overnight fee -0.0080%
Short position overnight fee -0.0003%
Overnight fee time 22:00 (UTC)
Spread 0.00006


239.02 Price
+1.900% 1D Chg, %
Long position overnight fee -0.0262%
Short position overnight fee 0.0040%
Overnight fee time 22:00 (UTC)
Spread 0.14

“As an established battery-technology company with proven products and a robust pipeline of new technologies, we are excited by the industry demand and validation of our battery solutions,” said president and CEO Yang Wu in a news release accompanying the earnings report.

He said the company has won several new multi-year contracts with leading manufacturers, driving substantial growth in forecasted contracted revenue since the business combination was announced in February.

Microvast reaffirmed its full-year revenue forecast of $145m to $155m. But some capital expenditures will move into 2022, bringing 2021 capital spending to between $120m and $150m.

Wu said the company expects to announce two new products in the first quarter of 2022.

Read More: Lithium boom takes shape in Latin America

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The difference between trading assets and CFDs
The main difference between CFD trading and trading assets, such as commodities and stocks, is that you don’t own the underlying asset when you trade on a CFD.
You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade in order to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.
CFDs attract overnight costs to hold the trades (unless you use 1-1 leverage), which makes them more suited to short-term trading opportunities. Stocks and commodities are more normally bought and held for longer. You might also pay a broker commission or fees when buying and selling assets direct and you’d need somewhere to store them safely.
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