The reason the SP is where it is, because, based on the information to hand, the market has determined so.
Look at LCK's current position. Based on the information we have been provided, IMO, this is the situation:
1 Additional funding will be required before the end of year.
2 Funding will come via a share placement or or some sort of income. My bet is share placement.
3 If by share placement, it will be either by standard shareholder CR, or by Investor Second Tranche.
4 Second Tranche. If the Investor plays hard ball, in accordance with the rules of the Agreement, funding might not be available until 13 Jan 2022. If earlier SP will be as low as the skill of the Investor can achieve.
5 If it is by shareholder CR, at this late stage, and given the current SP, it will have to be very attractive (low SP).
6 If you are hoping for any other type funding, other than a govt grant, you are dreaming.
7 If you think you will see a completed BFS by mid December, and consequently a raising of the SP, you have statistical evidence against you, therefore, highly unlikely.
8 If you think prepayment of Off-Takes, up to five years before production, you are dreaming.
9 If you think you will receive massive share placements (up to $400 million) before end of year, you are dreaming.
10 If you think anything financially substantial will happen before Stage 1 is successfully completed, you are dreaming.
11 If you think that there will be any large investment before the FID, and the Korean Banks are on board (by their own words), you are dreaming.
Dilution, dilution, dilution. At the moment, IMO, the SP Achilles' heel.
Be prepared, in the next few weeks, for an interesting lesson in financial management.
If you are a long term holder, and not interested in trading, and not concerned with opportunity costs, you might feel better if you consider putting you shares in the bottom drawer, and coming back in five years time.
All my own opinion, of course. J L.
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