SHORTS, MANIPULATION, MACRO AND THE STATE OF AFFAIRS
Shorting in orange Share price in grey Says it all.....
Now with the lithium price included
Now with lithium price and institutions So, the shorters have been motivated MOSTLY by the lithium price.
They see weakness in a sector and pile in, exacerbating the downward pressure in anything they perceive as weak.
Fundamentals in a company almost don't matter. In many cases, it can drive a solid company to below bricks and mortar value. Buffett seeks these companies out, and buys at these lows...and then just waits......because if its a solid company ,the fundamentals will always pull it through the short term weakness.
Over the last 6 months, Sayona (and CXO, PLS et al) have gone from strength to strength. We have had resource upgrades, gone into production ahead of time and under budget, have existing offtakes, bought massive tracks of land around both hubs, entered into further strategic partnerships with Troilus and Jourdan, and have even had the prime minister of Canada visit. Did these guys care....no
Coordinated attacks on the lithium space- Negative reports with minimal fact written by junior employees, sending shockwaves through the industry. Extended social media campaigns, to drive retail sentiment down Share price manipulation, coordinated by an army of bots in algorithmic volume weighted trading to steer the SP down. Massive Shorting, to suit the narrative. Etc...etc..... Which facilitated a buy in point for them to buy, and lend out shares.
Only naked short selling is illegal- Non naked Shorting is legal.
However, coordinated manipulation of markets, when the true forces of supply and demand are impacted is highly illegal. And one of their major tools to facilitate this is shorting.....
So, now that we are seeing the shorts consistently exit their positions in Sayona, are they hurting?
In a word no. No short squeeze, no rapid rise in SP....nothing.... The only way to truley facilitate that is an LTR type TH, then some massive news...TO..Merger..etc....
Controlled, coordinated and orderly exit, retaining maximum profit, with some going long now, to profit on the way up.
Is our share price rocketing up in the same ferocity it decreased..no. That is part of the unfairness of it all. They always seem to win.
Unless you hold......
Going back to September, our SP was around 35c entering the 200. Immediately heavily shorted and driven down. The Lithium price was still rising, so why did it happen so ferociously?
There is a strong argument which points to SYA being overvalued, driven up to those heights by emotional dumb retail money. Our fundamentals back then were no where near as strong as what they are now. The difference being we could see and believed in the strategy that Brett was selling, and had valued the company on its future potential. Similar to Albemarle and LTR. I still see it today. A couple of videos from Brett's last address at a lithium conference, and the comments start flowing again...I bought more....another 10000 in the coffers ....$1 party...$2 dollar party..Melbourne, WA....Vegas!!! Its hard not to get excited when you believe in the narrative.
The market back in September supported this, not only with us but with many yet to be fully derisked projects. But as market conditions in the back end 2022 weakened, the markets appetite for risk diminished, and money starting flowing out to safe havens, or sitting on the sidelines. So if you combine the overvalued narrative, with the manipulated lithium forecasts of a price crash, I could see how these guys would think SYA, and the lithium sector in general, could be targeted and driven down hard.
An opportunity they took....to the extreme, with many projects driven down to below half their values. Then you get these BS shorting research reports coming out and crashing the price of anyone they target...what a load of crap. They use shallow truths to push their objective, usually with no true in depth analysis to their claims.....and crash an SP. Why people listen to this crap is beyond me.. Now you know why they target high retail. Emotional driven, some under researched, sentiment driven. Lithium price forecast to crash..and they sell... BS shorting report...and they sell The CEO is selling....and they sell SP under pressure...they sell. Patience for some....limited ETc...Etc....
So they short on the way down, buy in the lows and ride it back up.
If you are reading this, it is not meant to offend retail holders, of which I am one. I am just trying to illustrate how these other market forces view the landscape.
BUT THE TIDE IS TURNING MY FRIENDS.....
China opening Further government incentives Lithium price UP. EV sales UP EV sales penetration increasing in China, US and Europe( The mass adoption S curve is taking shape) Home storage forecast to grow 100% this year Limited new supply-Greenfield production mostly overbudget and behind in time Structural deficit now the narrative, even by Goldman's
SYA/SYAQ SYA producing under budget and time( Actually started in Feb) SYA increases resource and southern and northern hubs- Possibly 200million tonnes by Q4 23 SYA increases land holdings by at least 10X, via Troilus and Jourdan, also taking a 10% stake in Troilus, a future gold producer. SYA debt facility to 200m SYA produces 6% and has shipped 5.7% to port, with the sweet spot being 5.4% for maximum return SYA to produce and sell 120,000 concentrate for 2023 SYA fully ramped by October, although I forecast it to be by August. SYA aiming for 1,000kt concentrate (1,000,000) both hubs SYA partner Morella now drilling Mallina WA SYA destined to go downstream, carbonate and hydroxide.. 30kt carbonate southern, 100kt hydroxide northern SYA to increase daily throughput from 3800 to 4200 to 4500..eventually to 5500tpd at NAL( with in pit iron rejection) SYA second offtake due now- ITS VERY COMPLICATED- Already With strong ties to Tesla and LG, GM and Ford being continually mentioned, VW and Stellantis future requirements, its complicated. It could involve short term at NAL with long term at Moblan. It may include strategic partnerships, equity stakes and JV for chemical conversion. It may include first rights clauses. It could involve short term spod and long term carbonate and hydroxide. It needs PLL input, as a 25% partner at NAL, which may affect their own off takes. It may include a second concentrator at NAL. Remember if we produce excess spod at NAL, that is not consumed by refining it goes to PLL for 900 LOM, so they bettter build a MASSIVE refinery....or multiple refineries, may be Amoss? A staged approach is probably the best strategy here, because if you lay out ALL the variable to 2030, it very complicated.
SYA Moblan PFS due now. This resource is sizing up to be the Monster of Moblan. Already the biggest, highest grade, singular tabular ore body in Nth America, IT WILL GROW, to possibly the size of LTR's Kathleen Valley. With the Troilus claims extending the strike area by kilometers. Already 2.5 kilometres long and almost 1 kilometre wide, 50mt at 1.3 or 71mt at 1.15%, it still has another 60000m of drilling left, with a resource possibility in the mid 100's MT, at 1.3%...and we will know within 6 months. Partnered by Soquem, the governments/IQ's exploration and drilling arm, we may even be offered a further 20+ % ownership at some stage. SYA carbonate PFS due now...at least 23kt at NAL, probably 30kt. The daily throughput increase will see to that, with process improvements and upgrades to the existing infrastructure in the carbonate plant to boost to 30.
So where does that leave us.
Lithium price up Lithium structural deficit ahead EV penetration increasing Shorters exiting Fundamentals through the roof Short term catalysts X3 MC still undervalued Macro soft but stabilising SYA ramping to nameplate with 5.7% concentrate already at port
It Should all lead to a sustained, steady, organic growth back in SP/MC to true value, which we are already starting to see. The naysayers are out runway to launch their BS. The narrative has shifted and tide has turned in our favour
I am a LTH, so It's still nice to see the celebrations on the forum for just a 0.5c increase. The newbs ask us why we celebrate this?
Best summed up by a World War 1 quote- ( no disrespect to the diggers)
It is a war of brute material; for hours on end you bombard them with 210's, 305's, and 380's, and when everything appears dead, when there's no more wire and no more trenches and when the survivors have been reduced to a state of madness, they send the masses out to attack. When the French are on the receiving end, not one of them breaks through and if there's only 10 out of 100 left, these 10 will fight on.
Our translation-
It is a war of brute material; for hours on end you bombard them with , downrampers, false reports and shorters, and when everything appears dead, when there's no more SP and no more value and when the survivors have been reduced to a state of madness, they send the BOTS out to attack. When the LTH's are on the receiving end, not one of them breaks through and if there's only 10 out of 100 left, these 10 will fight on.
This is why we celebrate.....
Good luck everyone.....
SYA Price at posting:
23.0¢ Sentiment: Buy Disclosure: Held
(20min delay)