yeah mate, I would be a very naive lithium investor if I didn't have some idea as to how other companies were currently performing, but linking current producers share prices being lower to CXO being approx 5c next year is unfounded in my view. You mention PLS, but we could add KDR and many others that have had some recent SP depreciation - it is important to note though that all these companies producing MC is nothing like their exploration MC (even though there may have been significant spikes in between). There is a well documented SP/MC curve that applies to lithium stocks, and it states that companies see SP appreciation during exploration, a lag as they move towards producing, SP appreciation when they approach producing, and then a lag as they become a producer (but still higher than their exploration SP/MC) - if you think about it, it actually makes sense from a human psychology point of view. The exciting times are exploration and leading up to producing and the more boring parts are proving up the resource and actually producing. I think that this 'producer lag' is a little over done at the moment, but it is evident non the less.
Given your reference to producing companies, I can only assume that you plan to buy into CXO when it is producing, and you think the SP will be approx 5c when this is the case - do the numbers on this - if they were producing, they would be into the payback period and starting to move towards free cash flow. If you think that a company approaching nearly 150m in free cash flow would be valued at approx 30m, I would suggest that you need to do some more research. The SP is likely to appreciate this year and early into next year, take a bit of a breather as they start to produce, but the breather won't be around where we sit now, more like 10-15c I think.
As for the wager, I have nothing to prove to you - I don't invest to show to others how right or wrong I got it, I invest to improve my own situation and for no other purpose - but the competition you seem to crave can be assessed by a simple scenario: if the SP is around 5c next year, I won't have made much (although this assumes that I sell nothing at all during the appreciation I see coming) and you will be right, if it isn't around 5c next year, I would have made a heap and you will be wrong - I won't actually care to share either scenario with you though because it is not what matters to me.
On this post, take what you will out of this but I will not respond to any other comments by you on this topic. I am very happy to discuss this stock and investment ideas, but your challenge of a wager suggests that this is a competition, which it is not. I will happily converse with you on other topics as they come up, but this one, for me, is done. Good luck with your assessment of the company, I hope it works out for you.
CXO Price at posting:
4.1¢ Sentiment: Buy Disclosure: Held
