Very leaky ship
https://www.copyright link/rear-window/asx-probes-piedmont-lithium-s-tesla-deal-20200923-p55yit
ASX probes Piedmont Lithium's Tesla deal
Joe AstonColumnist
Sep 23, 2020 – 11.01pm
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The Australian Securities Exchange must be a seriously long way up the clacker of Piedmont Lithium.
The US lithium developer’s shares were placed in a trading halt on Friday, after its shares spiked 67 per cent (from 9¢ to 15¢
over the previous week on no news whatsoever. Last week, 7 million Piedmont shares traded on Wednesday, followed by 11 million shares on Thursday and 8 million on Friday. The average daily volume for the past 30 days (which is inflated by last week's trading) is still only 2.4 million shares.
Piedmont promised a response to the ASX’s price and volume query by Tuesday morning. But before the market opened on Tuesday, Piedmont applied for its shares to remain in suspension until Thursday morning.
Then on Wednesday morning, Piedmont announced what it characterised as a five-year lithium supply pact with Tesla. By no coincidence, Tesla held its annual “battery day” on Tuesday (US time).
Incredibly, Piedmont announced this supply pact on its own website but not via the ASX platform. Piedmont removed the statement from its website soon after posting it, but not before it was picked up by Bloomberg.
It doesn’t require a market sage to deduce that Piedmont’s deal with Tesla leaked. Whoever was beneficially buying large licks of Piedmont last week will want to have an impregnable explanation at the ready. Clearing and settlement house Pershing alone executed 3.4 million Piedmont shares last Thursday, and you can bet it’ll be taking calls from the Australian Securities and Investments Commission.
Piedmont’s “pact” with Tesla wasn’t published by the ASX because the ASX held it up to scrutinise its veracity. Bloomberg reported, for instance, that the pact “is conditional on [the two parties] agreeing to a start date between July 2022 and July 2023” – so it could merely be an agreement to make an agreement. Later. Potentially. Which would be straight from the playbooks of GetSwift and Etherstack.
By proceeding with the announcement independently before the ASX released it, Piedmont breached
Listing Rule 15.7. It will undoubtedly be explained away as an administrative error (known also as “Musketeer fever”
.
But what strikes us as seriously reckless is Piedmont extending the suspension of its shares for what appears to be the purpose of getting to Tesla’s battery day without having to explain the abnormal trading. That would be audacity with a capital ‘A’ – the kind Elon himself would be proud of. When this announcement does finally materialise, we half expect the headline to be “Funding Secured”.
