First - I'm definitely no expert.
This is just my average punter's take on the last few weeks.
You have to consider the timing of the merge.
We hear about the merge at the end of May and there was a boost a big boost of enthusiasm. Its a very exciting idea that tackles the future earnings and financial capacity of the company to develop it's assets and retain its profits in-house.
Share-holders are also informed that the DFS for the flagship brine project is imminent.
SP rockets fairly quickly to mid 50s.
Then Brexit happens, more or less coinciding with the beginning of the merge vote.
This crashes most stocks briefly.
GXY comes back quickly but some use that period to exit and wait, and were very upfront about taking profits whilst they wait to see how it pans out - brexit and merger. Others sold out to take positions in GMM for the benefit of the ratio of shares on offer. Others to play the brexit recovery in blue chips etc.
The risk of the merge was balanced by a healthy view of nearly all posters here and the buoyancy of the sp - that the merge terms were fair and their own personal votes flowed in.
As the share vote tally climbed up slowly it still left the share price without much room to move. On one side you had the possibility it could still fail (creating uncertainty and disappointment) and on the other the fair certainty that not much would be gained in the sp while we waited.
Towards the end of the period shorts moved in. 50c was supported strongly for weeks but in the past week or so they proved a little too aggressive. This then does its own self-prophesising deal on the charts which don't reflect the reason for a stock going sideways for a while , or the likelihood of the reversal bounce when the obstruction (the merger) is out of the way.
A few weeks of waiting have led to lower volume in trading too, which means you have a build up of impatience and the seller side can get stacked by those who are using this period to accumulate.
Most have just sat out this period , some buying the dips and hoping to profit further if there is more anxiety.
On top of this there have been a lot of movements in the general lithium sector. Orocobre sacked their boss and dropped heavily in sp based on disappointingly slow ramp-up. PLS have just been hit with legal action over Right of First Refusal that creates an issue that will not be swept aside lightly. It potentially injects MIN in between them and any clients and first shot at any deals they do. It potentially jeopardises their plans for vertical integration. NMT sold out a vast chunk of their mine just prior to it being hugely upgraded in size, released a DFS that showed less profitability from a planned hydroxide plant of the future.
Micro-Juniors have also tanked. Some found no lithium of sufficient quality or quantity on their tenements. Some just tanked because its a boring wait with nothing going on.
With GXY and GMM making no apparent sp headway - with all that they have going for them (production, merge, healthy profits, future contacts etc) - then the juniors started looking much less viable.
There is something in the air, too. There has always been the talk about a lithium bubble. Now with around 100 companies on the ASX chasing lithium its certain that there will be very big losers in the explorer side. More and more have lost money on small lithium players failing to live up to the hype. Tesla had a crash blamed incorrectly on auto-pilot.
Lithium took a hit and suddenly you had days when all lithium stocks were red.
Mining is a difficult biz. A lot can go wrong between drilling and shipping.
That is why I invested here.
That, and the fact that unlike other companies with just one resource, there is the potential for many strong announcements and exponential growth as each asset begins producing.
That should serve to keep the sp on it's toes for years. Always anticipating that there is another chapter about to start.
...And that management have experience. The only company to have run a spodumene plant.
So much else to consider sits on the positive side of the ledger.
On the negative side - things go wrong - things get delayed - competitors come etc.
At the end of the day nothing beats having an insurance policy (shipments and contracts) against things going wrong (delays with build process, legal action, market instability).
I am in for the long term. The prospect of slow steady increase in value and protection against the shocks that destroy explorers is why I am here.
If you need fast up and down yo-yo stocks then GXY is not for you.
We now sit on the verge of a conditional merge victory. Anyone betting against a rise in Galaxy's share price must be bearish on the rise of lithium as a whole because there are so very few companies that are actually producing. There is existing demand that we are meeting with our product and we don't need hyperbole to say that things are looking very good for us.
I don't look at this like a chartist. I'm looking at 6 months down the track.
Are there positive and real developments in that period? Damn right there are.
If you like what you see in Galaxy, or any other company, it is wise advice to take a long position and hold.
Keep a clear head and read all announcements.
Don't get thrown by fear in the market - make those judgements when the company's prospects have materially changed for the worse.
then - in the meantime
Be nice to your wife or your husband.
Enjoy your life, Pay your bills etc.
Speak to random strangers for hours about weird esoteric stuff.
the regular stuff..
Good luck.
