So the short squeeze is finally playing out..It always surprises me how long these events can take to unfold..but it is more a product of being too close to the screen and trying to trade every day..
Despite Lithium stocks being absolutely on the tear in recent months..(PLS AJM DKO GXY to name a few..)
Orocobre seems to have been in a game of cat and mouse with the shorter trying to cover his shorts as can be seen below.
http://www.shortman.com.au/stock?q=ore
He has been successful in keeping a lid on it around the $3 and covered around 3,000,000 shorts but now he has been forced into aggressively covering as he finds himself in a perfect storm 1) lithium bull market for exploration companies with some stratospheric valuations 2) the price of lithium carbonate having more than doubled in China in a short space of time 3) market for electric vehicles taking off..350,000 preorders for Tesla Model 3 4) grid storage and home storage requirements are starting to increase rapidly..
Most importantly Orocobre is now cashed up having raised over $70m in fresh capital, is cashflow positive at a production level and is increasing production towards nameplate.
The plant is also scalable and has a low capex route to increased production. (circa 40% of original capex)
If you look at a market level...The price in Canada hit $3.52 overnight on good volume and the offer got completely wiped out today around the $3.30-$3.35 level..and now there is hardly anything on the offer. In a tight stock like that, you don't want to be 6,000,000 shares short.
It is finally happening, many stars have aligned and it looks like it has a way to run..
