Not to be the bearer of bad news — or Captain Obvious, for that matter — but 2021 didn’t provide a happy ending for investors of Colorado-based Solid Power (NASDAQ:SLDP). So far, 2022 hasn’t been great for SLDP stock, either.
What’s going on, exactly? It’s not as if the demand for solid-state electric vehicle (EV) batteries has disappeared.
And make no mistake about it: Solid Power’s batteries are unique, efficient and powerful. As the company explains, Solid Power “replaces the flammable liquid electrolyte contained within a conventional lithium-ion battery with a proprietary sulfide solid electrolyte.”
The result is a battery that’s designed to be safer, more stable at high temperatures and more cost-efficient. As we’ll see, Solid Power deserves investors’ attention more than ever now. If anything, the reduced share price only makes the bull thesis all the more compelling.
A Closer Look at SLDP Stock
Let’s start off by going back to where it all began. Last year on Dec. 9, Solid Power debuted on the Nasdaq exchange after the company completed its special purpose acquisition company (SPAC) merger with Decarbonization Plus Acquisition Corp. III.
The hopes ran high as SLDP stock traded around $14 on that first day. Unfortunately, any dreams of battery-powered wealth were short-lived.
Before the end of 2021, the Solid Power share price had already fallen below $9. Fast-forward to late January of 2022, and the stock was hovering around $6.
There’s a lot of technical damage done here — we can’t deny that. The $5 level will be a critical battleground, as some traders will call any stock that trades for less than $5 per share a penny stock.
Perhaps we can attribute the share-price decline to waning enthusiasm for EV investments after the hype phase of 2020 and 2021. Another contributing factor was the broad-market decline in the major stock market indices, which occurred in late 2021 and early 2022.
Adding Rocket Power to the Board
If anything can get the investing community enthused about Solid Power again, it’s the company’s outstanding leadership. As they say, success starts at the top.
A case in point would be Solid Power CEO and co-founder Douglas Campbell. With a firm background in advanced technology development, Campbell founded thermal management business i2C Solutions and co-founded small-satellite industry component supplier Roccor.
There are plenty of other industry veterans on Solid Power’s leadership team. Yet, a particular addition to the company’s executive board adds an extra dose of “jet fuel,” so to speak.
Just recently, Solid Power appointed Lesa Roe to its board. Roe brings more than 35 years of executive leadership and engineering experience — and along the way, earned credentials which few people can claim.
From 1984 to 2017, Roe served in a number of roles at the National Aeronautics and Space Administration. Of course, you probably know this government entity better as NASA.
Roe’s succession of roles culminated in her serving as the agency’s acting deputy administrator — making her NASA’s second in command — as well as deputy chief operating officer.
Four Reasons, and Maybe More
Roe’s appointment should stir up interest in Solid Power, no doubt about that. Yet, there’s another recent development which ought to get more traders on board with SLDP stock.
Despite the stock’s negative trajectory, Needham analyst Vikram Bagri initiated coverage of Solid Power with a “buy” rating. Additionally, he assigned the shares a highly optimistic $13 price target.
As Bagri sees it, SLDP stock provides a “relatively early-stage investment opportunity” in the EV battery industry. Amazingly, the projected total addressable market for Solid Power’s products is expected to reach roughly $300 billion by 2035.
If Solid Power can capture even a sliver of that fiscal pie, the company’s revenues could balloon in the coming years. On top of all that, Bagri served up a four-pack of reasons to consider an investment in SLDP stock now.
The company “has a capex-light business model, no need for outside capital, backing of OEM industry heavyweights, and a decade of research experience,” the analyst argued.
The Bottom Line on SLDP Stock
There’s no other way to say it: investing in Solid Power will require a great deal of risk tolerance. With great risk can come huge rewards, though. Is it possible that SLDP stock has been unfairly and excessively punished?
Yes, it’s definitely possible as Solid Power’s addition of a NASA luminary – and a host of other positive factors, as cited by Bagri – make this a battery business worth its share price and more.
On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
David Moadel has provided compelling content – and crossed the occasional line – on behalf of Crush the Street, Market Realist, TalkMarkets, Finom Group, Benzinga, and (of course) InvestorPlace.com. He also serves as the chief analyst and market researcher for Portfolio Wealth Global and hosts the popular financial YouTube channel Looking at the Markets.