...why go long in a sector that attracts shorting interest?
...only stale bulls (those already caught holding) would hope for a short squeeze so they could hope for a revisitation of old highs.
...the shorters have got strong grounds to remain negative in the short term for all the reasons spelt out on this thread (though I declare that I never short).
...so market participants need to exercise caution not to be taken in by the 'pumpers' in some of the HC lithium stock forums, who are trying to resuscitate a price rise, enticing entries with spruiking of takeover prospects and all (there won't be any takeovers, not by Gina, not by Germans nor Saudis).
...IMO a lot of pain awaits lithium stocks in the months ahead. Because EV demand will fall short in the winter hibernation that will persist for 1-2 years. Am also expecting an adverse Tesla effect rubbing on US lithium stocks in due time.
----
I track the short interest in the major #lithium stocks. Data for mid May is now out.
The $ value of the #shortinterest across the larger names I track is currently $5.2bn and remains close to its ATH ($5.8bn) and over 60% of the revenue base of the entire #lithium industry.
BIG increases in the SI as a % of free float for $SGML (19.2% and a new ATH) and $LAC (13.9% also an ATH). Rest remained broadly stable.
Still waiting patiently for the short squeeze, which when it comes, & IMO its a WHEN not an IF, will be spectacular in some of these names.
I understand the short thesis - lower for longer #lithium prices = lower FCF & therefore lower stock prices. Sprinkle in higher unfunded capex requirements and marginal resource grades and some of the juniors will struggle to get to the other side. I struggle to make the same argument for the majors which are showing capital discipline, FCF +ve at current prices & with rock solid balance sheets. Takes two views to make a market. NFA & DYOR.
o $ALB 11.6% vs 12.2% at end April
o $ALTM 6.6% vs 6.6%
o $SQM 1.9% vs 2.0%
o $SGML 19.2% vs 16.3% (data from day before 1Q report)
o $PLS 21.5% vs 21.8%
o $LAC 13.9% vs 12.5%
o $PLL 16.8% vs 16.7%
o $LACC 7.5% vs 7.4%
o $MIN 6.66% vs 6.65%
o $LTR 10.1% vs 10.9%
o $SYA 7.2% vs 8.1%
