Watching the share price drop like it has makes no sense to me in regards to value of the company. However it may make sense to competition.
Based on what lake resources has this puts them up with the big boys. Secondly the method of extraction should it succeed comes as a real threat to competing companies who have now invested so much into the convententional method such as SQM. They will want a return on their investments in the near future. Lake resources has not started processing yet but if they do it could severely affect the neighbouring mines in regards to volume of delivery and time and thus profit. More importantly may cause investors to jump ship. The companies beside them have invested so much already and there is no turning back. They need to get their money back first before Lake Resources hits its stride.
It would make sense to buy Lake resources shares and then dump it at a lower price in order reduce the interest of other investors but more importantly reduces the ability for the company to raise a substantial amount based on their share price which unfortunately for lake tells banks or investors what they are worth. This reduces the amount of money that can be leant in terms of LVR.
market manipulation would sum up the above. However, i believe there is always a reason. Observing my own world where I can borrow money from the bank The stronger my portfolio the more the bank will lend the more I can invest based on LVR.
Thoughts anyone?
I would like to underline that Lake Resources is a serious threat in the immediate future in regards to returns. Long term I believe all that is producing is in the race.
LKE Price at posting:
6.3¢ Sentiment: Buy Disclosure: Held
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