Airconditioner was a poster I admired a lot (and how I wish he would post again).
Anyway, I was reading a post of his from 13 January 2019. It is on the Banter and General Comments thread. Go and have a look at it and see how true it still rings now. When he did that post the share price had been shorted down to an astonishingly low price around $2.50. We were all complaining about the manipulation and that the share price had been thrashed. AC made the comment that with 17% of the stock having being short sold, the only people that really needed to buy the stock were the shorters.
Well, the shorters continued to thrash the stock and they have done exceedingly well. But AC's comment from back then rings even more true now than it did then. Those shorts need to buy back those shares in order to close their positions, and it seems the shares may not be there for them to buy. If retailers hadn't sold out at $2.50, why would they sell now?
I had wanted to post a reply to AC's post, but it seems HC won't let you reply to a post that is so long back in the thread. So for those who can't be bothered to search for AC's post, I hate to see such a great post slip away under the weight of subsequent posts and be forgotten. So I have done you a favour by reproducing some of what AC said (and keep in mind this was nearly 10 months ago when the share price was at around $2.50):
"I just feel I understand this company's strategy, and agree with the roadmap for it, as designed by AT, feel that he is the right man for the job, and doing it well under highly challenging (and fairly random) global market circumstances..."
"It's a class act, and on balance it's a company that has very much smaller chance of failing to achieve its plans than bathing itself in glory as the first Australian lithium major".
"It always comes back to fundamentals.Future earnings growth. Bank Balance. Capable Management. Location Location Location.The share price was driven into the ditch as soon as the strong Q3 quarterly and POSCO deal were announced because the short position was balanced too dangerously and a massive US bank was about to lose its shirt'. (MORGAN STANLEY)
"I take on board that the market is not all about logic.We were sold down last year when it was not logical to punish the company. It just fit a specific financial institution's agenda at the time.It was part of a global lithium shorting strategy and we were simply collateral damage in a media beat up. But that is as far as we could see into it with the last of the Morgan Stanley Sub holders documents. Now - so many people are here applying logic illogically. How much more than $500m should the company have made last year to earn your respect?"
"The share price is what it is, but judge for yourself if this a company going up or going down.."
"As to what is ahead for the company in 2019, the only thing I would like to point out are the 2 words that AT has used more than once.... Those 2 words : "Free Carry."
"The market may have underestimated the scale of GXY’s bank balance by the end of 2019 by a staggering amount, even with SDV construction going at full swing. POSCO cash may or may not be considered as part of this equation".
"Everybody knows what I’m talking about.The instos who are shorting know it, and the fundamental wonks know it. Galaxy could start an annual dividend now and still have the cash to build SDV and JB".
"The WA hard rock deals signed by our competitors have been Bottom of Market and Position of Weakness deals and have diluted shareholders and weakened future capacity to do better ones" (ALITA, PILBARA, ALTURA)
"The SDV resource represents a massive high quality tier one brine resource that is ready to go. There isn’t anything else on offer to the market in the same category. The long and costly foreplay required for a brine operation has been done. Galaxy can and should simply give the low-ballers the cold shoulder and wait them out. This is 40 years of share holder value that is riding on the equity/offtake deal and Galaxy has other ways of getting there. Alone being the obvious alternative".
"(Galaxy) Best positioned for a run when the markets realise how well they’re set up for a massive and broad battery minerals re-rating. Why? The investments in production has to happen now for them to bring on the supply for the expected surge in 2025. All the future demand analysts are saying this same thing. There is not enough supply in the pipeline. Not enough money being spent right now. So why is it so fashionable to ignore this and call it all Fake News? It’s more head in the sand stuff. It's coming so fast now. Who can not see the near future headlines declaring the top 10 selling cars dominated by battery models? I just don’t find there is much point debating any of this with people who will never be persuaded".
"Galaxy has a massive cheque in the bank and its being priced down as if to say that this did not happen.There is a massive lithium counter attack still to come. Anybody reasonably rich can do it - though some collusion is handy. Push a little and slaughter the retail shorter in the process, which in turn makes it uncomfortable for the insto shorter, and we already know that there are established limits to when appropriate collateral must be provided. There is 10s of millions to be made from a short squeeze, rolling back this over-sold and over-manipulated stock. It won't happen tomorrow. There is still too much teenage angst in the bedrooms. It will happen though. Even in its muted form, the slow disappearance of the short position is effectively the same thing. The free market will do a fine job of pricing this stock fairly".
"Galaxy was the only one to put together an ETF style geographically and chemically balanced set of hard rock and brine and so freaking what if its a year or 2 in the waiting? Galaxy are too far ahead of the rest of the ASX to be copied. The POSCO cash is the start of how we climb the next mountain and that money is already in the bank earning interest. 2018 was pretty crap for our share price - BUT the oversupply fear campaign put the dagger through the heart of plenty of lithium hopefuls too, and that isn’t exactly bad for producers in the short-medium term".
"Personally, I don’t think there is that much time before lithium producers take off again. A dozen minerals needed for electrification are in short supply. Any of the beginning to run again will remind the entire market how poorly the slowly the supply side has been getting its act together".
OH YEAH, BRING IT ON. THAT WAS A GREAT POST AIRCONDITIONER.
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