GXY (ASX) Banter and General Comments

Originally posted by SpaceWalker: ↑

Let's compare GXY to Lithium America's who has partnered with Ganfeng. Minar Exar the operating company was 37.5% owned by SQM and SQM also held 25% of LAC stock. Ganfeng bought the SQM shareholding in Minar Exar and LAC. Recently they increased the shareholding in Minar Exar to 50% by injecting $160 million into LAC and expanding the LiOH production from 25k tons to 40k tons. The stock price of LAC has moved from a low of US$2.73 to a high of $4.80 per share. The resource size is now estimated at 17.9 million tones - a limitless resource. It will allow the company to keep on expanding into the future.

GXY had all the opportunities on hand. A massive reserve owned by GXY and no partner. First we sold half of the salar and then went looking for a partner. How stupid was that thanks to AT and our Board. Now we are left with a competitor and no expertise except some US$220 million representing approx 50% of funding requirement to build the SDV. In my opinion that's the reason the stock price of GXY is so depressed. Until a JV partner comes along nothing is going to change as investment bankers and lawyers cannot build and run a speciality chemical plant and a mine. As a first step half of our board must go and be replaced by people who know how to get the job done.

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I appreciate your attempt to try to understand the reasons why the share price has tanked. I think you have made some good points, particularly about the need to bring on board someone who knows a bit more about running a chemical plant and mine (which they have now done with the new CEO announcement). I agree with you about the need to replace some other members of the board, and I'd probably be looking at the Chairman as one who should be removed.

However these are not the reasons for the stock price being depressed, as evidenced by that updated Top 20 shareholders list which shows a high institutional ownership. Even more interestingly, that updated list also revealed that some of those companies that have been bagging GXY and the lithium sector in general and promoting the lithium oversupply story have in fact been buying themselves.

Manipulation is the real reason for the share price being where it is and that has been obvious for a long time. It appears the short holders have been trying to cover for some time by pushing the price down a few pips every day (and it doesn't take much) in order to scare a few more retail holders into selling. At some stage though there will be a catalyst for a price increase (maybe with the release of the quarterly activities report) and the shorts will have to cover because more buyers will be hopping on anyway.