LTR: Short squeeze coming for shorters - 2nd highest likelihood in all ASX, page-4934

Yes, the market has absolutely been in the know about the potential takeover. I have a few thoughts about this whole situation.


J.P. Morgan - Back at it again - Will LTR see a takeover offer coming in soon?

Take a look at who RIO's advisors were on this deal.... to no surprise it is the very same J.P. Morgan which has acted as lender to Citigroup for the short selling of LTR shares. Given my previous post exposing their short selling arrangements, and more specifically pointing out Citigroups decreasing short position... could a take-over offer be on the table for LTR next?

Well... with LTR being less shorted than MIN & PLS, this does make it easier for a takeover to happen... But I just don't think short positions are low enough yet. Because I believe the institutional investors are colluding together via short sale agreements as well as acting as advisors to the likes of Rio Tinto (and probably the Someone)... I wouldn't expect to a takeover offer come in until short positions decrease to below 5%... But given the timing of the market and how low the share price is at the moment, an offer might still come through at the pain of those with short positions.

It's difficult to say, but probably not... however either events will positively impact the share price for LTR.


Would a takeover offer be good right now?

The acquisition seems to be coming as bad news for the Arcadium holders... for many of their holders this deal will come as a forced loss. Although disappointing for them, I can't blame RIO for doing so, after all, most of us are using the very same opportunity to increase our lithium holdings too!

But how does this translate for LTR?

LTR has an extremely bright future with a lot of growth and dividends to pay, its KV project is unparalleled and reigns supreme. As the market hasn't properly appreciated its world-class asset yet, it would be better to not accept any takeover offer in the current climate. An offer now wouldn't reflect LTR's true value.

Although I have considerable averaged down my holdings with over a monstrous amount of LTR purchase orders over the past few month, I still wouldn't want to accept any offer for LTR below $4.50 per share, this will make a lot more sense in 12 months from now.

I would not want any offer to come through right now, and I am actually glad we have some good competition with our significant shareholders like Tim Goyder, Gina, and LGES (if converted to equity) and a very smart community of retail holder to effectively block low offers. This is very healthy, and the best pathway to creating long term shareholder value is for LTR to continue as it has and not deviate from its pathway.

Positives for LTR following the Arcadium takeover offer?

One major positive from the takeover offer is that this deal will provide a very strong sense of confidence in the sector and force a new market revaluation for lithium stocks. This will immediately affect LTR as we saw earlier this week with a 20% increase in a single day (when LTM was up 45% not the confirmed takeover news). Given the now known premium that offered, LTM shares should continue to edge upwards until the acquisition is complete. This will also affect LTR stocks significantly. I wouldn't be surprised if we are up +15% to +30% tomorrow morning.

There will be a lot of new holders coming in off the back of the news circulating around, and if LTM delists following the acquisition being completed, I would also expect a lot of paid out LTM holders to flow into LTR, MIN, and PLS as they still believe in the industry and its growth prospects.

Despite everything above, I am enjoying the show and continuing to increase my holdings while I have this very rare opportunity.

If RIO wants to acquire lithium assets now, why shouldn't I? Clearly the down ramping hasn't affected their judgement.

Good luck to all holders tomorrow, it'll be fantastic.

Kind regards,
CK