I was speaking with my broker today and trying to get some perspective on the power of hotcopper. He said there are roughy 150k active members and some 65-70k get a the regular feed - so, sufficient -ve or +ve noise can move a stock. From his experience, he's seen over-exuberance create panic and push share prices up / down 25%+ in a day in some cases.
His view on the graphite sector is positive long-term, but when your bell-weather - SYR - takes a 30% hit from its peak then smaller minnows will follow suit. You can't fight the tide. This can be exacerbated if a few HNWIs decide to eject or there has been a massive option conversation leaving an overhang that needs to be cleared. It creates a panic and rush for the exit via a small rear-door: crush, freefall.
Good time to reflect on basics: the drivers of shareholder value are the sum of forward discounted cash flows, management's ability to articulate and deliver to plan, and the macro environment's impact on sentiment. Of these, we've endured a moderate souring in the macro environment towards the graphite sector. However, this can turn on a dime too and lead to a sold re-rating. We are in high-risk, high-reward territory don't forget.
That said, VRC's fundamentals remain intact and haven't changed since it hit 15cts. Some new data points for the sector - Tesla's factory has opened in Nevada and production met expectations for 2Q, and its aiming to deliver 50k vehicles in 2H16.
VRC's management have delivered to plan: they have rolled out impressive mets, signed offtake MOUs and marketing actively to financial institutions in US and UK plus western-hubbed end-users. When there is something newsworthy to report then the market is informed.
Not all investors are here for the long haul, some trade in and out, some buy and hold, some early birds take some money off the table and enjoy a free carry. That's cool - but the positive thing to garner is that the EV / utility power storage evolution is moving ahead which is a structural event, which will require a huge amount of natural resources - Li, Ni, Co, graphite. Its disruption on a grand scale.
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