American Battery’s Meltdown Deepens: Stock Craters Over 26% Premarket, Retail Traders Bet On Rebound

American Battery Technology Company (ABAT), which manufactures and recycles battery materials in the U.S., is on track to extend its two-day slide, with the stock plunging over 26% in Friday’s early premarket session.

On Thursday, ABAT plunged 36.65%, with the downside accompanied by nearly five times the average volume, after the company disclosed in an 8-K filing that the U.S. Department of Energy (DoE) has notified it regarding the termination of a $57.75 million award, effective at the end of the budget period ending Aug. 31. The company said it has submitted an appeal to the termination. 

The government funding was initially approved for a project for the design, construction, commissioning, and operation of a commercial-scale facility for the manufacturing of battery cathode-grade lithium hydroxide. The company’s cost share was $57.75 million. As of Oct. 9, when the company was notified, about $52 million of the grant was outstanding. 

Undeterred by the adverse development, American Battery published the Technical Report and Pre-Feasibility Study (PFS) for the Tonopah Flats Lithium Project (TFLP) near Tonopah, Nevada. The company stated that the study confirmed the project's economic potential and potential strategic importance as a cornerstone of the domestic critical mineral lithium supply chain.

Retail users on Stocktwits have largely overlooked the cancellation of the government grant. Sentiment toward the American Battery stock has remained mostly ‘extremely bullish’ over the past month amid the U.S.-China standoff over rare earth imports from the Asian nation. The message volume on the stream was also ‘extremely high.’

One watcher attributed the premarket sell-off in American Battery stock partly to the sharp plunge in futures ahead of Friday’s open. 

Another user suggested that China buy 20% of the company. 

A third user looked for dip-buying. “Anything below my average cost is considered [an] accumulation zone. Buying more next week,” they said.

ABAT stock has gained nearly 131% this year, even after accounting for the two-day sell-off seen since Wednesday. 

For updates and corrections, email newsroom[at]stocktwits[dot]com.

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