Day: 23 May 2022

Bitcoin (CRYPTO: BTC) is many things to many people.

Some folks make use of the world’s number one crypto by market cap for everyday transactions, with more merchants in Australia beginning to accept digital assets as payment.

Other crypto investors buy Bitcoin planning to hold (or HODL) onto it for the long-term potential value gains.

And still other speculators engage in trading the token. Of course, they hope to buy near the low points of its big price swings and sell near the high.

But can Bitcoin play a role in a diversified ASX share portfolio?

The answer to that question will vary depending on who you ask.

Bitcoin gets the institutional investing thumbs down from PGIM

In its latest Megatrends Report, PGIM – the global investment management business of Prudential Financial Inc (NYSE: PRU) – pulled few punches when it comes to cryptos like Bitcoin.

According to the PGIM report, cryptos are not reliable assets to diversify investment portfolios. Nor do they offer an adequate safe haven in troubled times or act as an inflation hedge.

With the focus specifically on institutional investors, PGIM sees little benefit in directly investing in cryptos. It says that doing so adds plenty of risk and volatility.

According to PGIM CEO David Hunt, investing in an asset like Bitcoin is speculation, not investing:

As long-term investors and fiduciaries on behalf of our clients, three things need to be true for us to add an asset class into a portfolio: the asset needs a clear regulatory framework, it needs to be an effective store of value, and it needs to have a predictable correlation with other asset classes.

Cryptocurrency currently meets none of these three criteria. It’s much more of a speculation than an investment.

PGIM head of thematic research Shehriyar Antia said that atop the speculative nature, cryptos have as yet failed to live up to their safe haven billing:

Cryptocurrency may be a heroic quest to build a viable, decentralised peer-to-peer payment system, but its pricing is based on speculative behaviour, rather than a fundamental thesis around its value or utility.

Furthermore, with little evidence to support it as an effective inflation hedge or safe-haven asset, we see no reason for cryptocurrencies to be a part of institutional portfolios.

Don’t overlook the massive energy use

Then there are the environmental, social and governance issues (ESG) surrounding Bitcoin.

As we’ve previously reported, globally some cryptos use as much energy as the entire population of the Netherlands.

PGIM agrees that cryptos clash with ESG objectives. Its report narrows that down, saying that a single transaction on the Bitcoin blockchain uses as much energy as two million Visa transactions. That’s about equivalent to the power used by the average United States household in two months.

Look to the underlying technology

All this isn’t to turn retail investors away from possibly investing in Bitcoin or other cryptos.

According to PGIM chief operating officer Taimur Hyat, crypto investors need to look into tokens with real-world utility:

Cryptocurrency gets all the breathless hype, but it’s the underlying technology where we find the most interesting investment opportunities. Firms that enable real-world blockchain applications like clearing and settling transactions, preventing fraud, and tokenizing real assets offer significantly greater creation of value over the next decade. The old axiom applies — when there’s a gold rush, invest in shovels and pickaxes.

The threshold for Bitcoin to diversify investment portfolios

Contrary to PGIM’s take for institutional investors, Lisa Shalet, Morgan Stanley Wealth Management’s chief investment officer, gave her input. Last year, Shalet said that even with their notorious volatility, cryptos like Bitcoin could help diversify investment portfolios.

According to Shalet (courtesy of the Australian Financial Review):

For speculative investment opportunities to rise to the level of an investible asset class that can play a role in diversified investment portfolios requires transformational progress on both the supply and demand sides. With cryptocurrency, we think that threshold is being reached.

The Bitcoin price is up 3% over the past 24 hours, to US$30,145.

The post Can Bitcoin play a role in a diversified ASX share portfolio? appeared first on The Motley Fool Australia.

More reading

• Crypto venture firm’s lessons after $10 million haircut on LUNA losses
• Own crypto or NFTs? Here’s why the ATO could have you in their sights come tax time
• Why Bitcoin, Ethereum, and Dogecoin are falling today
• Why Bitcoin and Ethereum popped on Tuesday
• Using Bitcoin to diversify your portfolio? Read this

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Bitcoin. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The S&P/ASX 200 Index (ASX: XJO) is currently in the red despite a positive start in the first hour or so.

While the ASX share market is made up of individual businesses, collectively it can have positive or negative movements as it’s influenced by the different news of the day, week or even month.

No one can know what the ASX share market is going to do next. Sometimes there may be a positive news story internationally (or locally). Sometimes ASX shares can be influenced by what the next day of trading looks like in the US, or by the performance of international markets overnight.

US futures positive

The ASX share market may have been green earlier in the day as US futures pointed to a positive start to the week.

US shares have certainly suffered heavily in recent weeks. A gain on the first day of trading on Monday would be a bit of lost ground regained.

Currently, the pre-market for the US is showing a possible rise of at least 0.6% when the markets reopen. But that could change. It has already changed for the ASX 200, possible due to news that came out of Beijing.

Chinese COVID-19 setback

As reported by various media, including Bloomberg, the Asian superpower has just reported a record number of new COVID-19 cases in its current outbreak in Beijing. This, according to the news outlet, has increased concerns that the capital of China may see a broad lockdown as authorities try to stop COVID-19 spreading.

Shanghai, another huge Chinese city, has gone through a long lockdown to try to get on top of the spread there. China has been aiming for zero cases, which has become more difficult with how infectious the Omicron variant is. The lockdowns are also impacting the Chinese economy.

With how much Australia is connected to China economically, it may not be a surprise that a knock to China could hurt sentiment about the ASX share market, in the short-term at least.

What next for the ASX share market?

The Australian federal election is finally out of the way after a long build up.

Unexpected news can happen any time of course, but investors may be looking to the size of the next interest rate increases from the Reserve Bank of Australia (RBA) and US Federal Reserve as the next major influence on the share market.

Time will tell what happens next.

The post Why have ASX 200 shares popped then dropped on Monday? appeared first on The Motley Fool Australia.

More reading

• ASX 200 midday update: Elders and Codan rocket, Incitec Pivot disappoints
• Why the IGO share price is rallying on Monday
• 5 things to watch on the ASX 200 on Monday
• Is the CBA share price a buy following the bank’s digital mortgage launch?
• Is QBE considered an ASX dividend share?

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The AGL Energy Limited (ASX: AGL) share price is suffering amid reports Wilson Asset Management (WAM)’s boss is dubious of the company’s demerger.

WAM founder, chair, and chief investment officer Geoff Wilson reportedly flagged the split could diminish funding for future decarbonisation.

At the time of writing, the AGL share price is $8.60, 0.35% lower than its previous close.

The stock has been in the red most of Monday. Meanwhile, the S&P/ASX 200 Index (ASX: XJO) has tipped lower in recent hours. Right now, the index is recording a 0.1% dip.

Let’s take a closer look at why the leader of the $5.4 billion investment house is against AGL’s planned split.

AGL share price falls on Monday

The AGL share price has struggled through Monday. Its suffering comes amid news Geoff Wilson is against the company’s demerger plan.

The split will see AGL’s energy retail business in the hands of AGL Australia. Meanwhile, Accel Energy will run its energy generation business.

According to The Australian, the WAM boss expects that, by splitting in half, AGL would create “two smaller weaker entities [with] little financial capacity to drive decarbonisation”.

My thoughts are that an un-merged AGL would have the financial ability of leveraging its 4.5 million customers to give offtake certainty while using its balance sheet and the green bond markets to lead investment, with a partial recycling of capital into infrastructure funds once project are approval [sic] and construction risks are resolved.

Geoff Wilson as quoted by The Australian

Wilson also told the publication that, aside from Powering Australian Renewables’ (PowAR) acquisition of formerly ASX-listed Tilt Renewables, AGL has forked out “virtually nothing” to develop renewable energy since financial year 2018. AGL has a 20% stake in PowAR.

It’s a similar story to that preached by Atlassian Corporation (NASDAQ: TEAM) boss Mike Cannon-Brookes. He’s leading the push against the demerger.

As The Motley Fool reported earlier, Cannon-Brookes believes Labor’s federal election win could pressure the company to ditch the demerger in favour of lowering emissions.

However, Macquarie Group Ltd (ASX: MQG) research reportedly tips AGL could benefit from the change in government.

It found Labor’s $20 billion Rewiring the Nation plan could benefit the energy company, reports the Australian Financial Review. Reportedly, Macquarie is flagging policies to help develop renewable energy like solar and hydrogen as potential wins for AGL.

The post AGL share price struggles as WAM boss slams demerger plan appeared first on The Motley Fool Australia.

More reading

• What might an ‘election won and lost on climate’ mean for AGL shares?
• Here’s why AGL shares hit the headlines again on Friday
• Why have AGL shares been getting so much love on Tuesday?
• Here are the 3 most heavily traded ASX 200 shares on Tuesday
• AGL share price bounces back amid latest demerger opposition

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Atlassian. The Motley Fool Australia has recommended Macquarie Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Well, the S&P/ASX 200 Index (ASX: XJO) seems to be having a rather shaky start to the trading week so far this Monday. The ASX 200 is, at the time of writing, down by an anaemic 0.045% at around 7,140 points after initially opening in the green this morning.

But rather than crying over spilled milk, let’s instead check out the shares that are currently sitting at the top end of the ASX 200’s share trading volume charts, according to investing.com.

The 3 most traded ASX 200 shares by volume this Monday

Pilbara Minerals Ltd (ASX: PLS)

ASX 200 lithium stock Pilbara Minerals is first up today. This Monday has seen a hefty 13.3 million Pilbara shares change hands as it currently stands. This doesn’t appear to be a consequence of anything out of Pilbara itself today. So we can probably put this volume down to the moves the Pilbara share price itself has undergone today.

As it currently stands, Pilbara has lost a meaningful 1.05% of its value thus far today and is down to $2.82 a share at the time of writing. Pilbara has followed the trajectory of the ASX 200 today and spent most of the morning in positive territory before seeing a dip into the red. This is probably why we’ve seen so many Pilbara shares trading on the markets today.

Incitec Pivot Ltd (ASX: IPL) 

Fertiliser and explosives manufacturer Incitec Pivot is our next ASX 200 share up this Monday. So far today, a sizeable 17.65 million Incitec shares have found a new home. This is almost certainly a result of the company releasing its half-year results before market open this morning.

As we covered at the time, Incitec reported some pleasing metrics, including a 955% surge in profits. However, an initially strong reaction from investors has now turned sour, and Incitec shares are now down more than 4%. No wonder so many shares have been changing hands today.

Tabcorp Holdings Limited (ASX: TAH)

Our third, final and most traded ASX 200 share of the day today goes to gaming company Tabcorp, with a notable 17.9 million Tabcorp shares bought and sold thus far. We did get a notice this morning that Tabcorp’s Lottery Corporation demerger is now effective following the company receiving final approval from the courts last week. 

Tabcorp shares have also had an interesting day. They initially fell on market open this morning, before spiking up to $5.46 a share just after lunch. The company has cooled off since and is now going for $5.40 a share, up 0.28% for the day. It’s this volatility that has probably sparked such elevated trading volumes today. 

The post Here are the 3 most traded ASX 200 shares on Monday appeared first on The Motley Fool Australia.

More reading

• Why Incitec Pivot, Openpay, PolyNovo, and Sayona Mining shares are sinking
• ASX 200 midday update: Elders and Codan rocket, Incitec Pivot disappoints
• Incitec Pivot share price fizzles despite half-year earnings increasing tenfold
• These were the best performing ASX 200 shares last week
• Here are the 3 most traded ASX 200 shares on Friday

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Everything isn’t always peachy keen in the stock market. History has shown us that volatility and market downturns are inevitable. However, as an investor, this doesn’t mean panicking and losing track of your long-term goals. If anything, it can be a chance to get closer to your financial goals — especially if time is on your side.

History tends to repeat itself

From 2000 to 2020, the stock market saw three major crashes that sent investors into a panic. In March of 2000, the tech (dot-com) bubble burst. On March 10, the Nasdaq Composite index peaked, breaking 5,000 for the first time ever at that time — up from around 1,000 in 1995 and more than double from 1999. From there, it went all downhill, with the NASDAQ losing close to $1 trillion in value in less than a month. As of May 20, 2022, it’s above 11,000, even after dropping from 16,000 in November 2021.

From 2007 to 2009, we witnessed the global financial crisis unfold and spark the Great Recession. It was triggered by a collapse in the housing bubble and ended up being the worst financial collapse since the Great Depression. On September 29, 2008, the Dow Jones Industrial Average (DJIA) fell by more than 777 points, the largest point drop ever at the time. The DJIA now sits above four times its 2009 lows.

The COVID-19 pandemic happened in 2020, causing a crash we hadn’t witnessed since the global financial crisis. On February 14, 2020, the S&P 500 was over 3,380, and by March 20, 2020, it had dropped to just over 2,300 points. As of May 20, 2022, it’s now over 3,830, even after being down briefly by 20% year to date.

Although past events don’t guarantee anything about future events, history tends to repeat itself, and the stock market has shown us time after time that it has the ability to rebound and bounce back from crashes and huge downturns. The current happenings of the stock market may make people anxious because they’re seeing their portfolio drop, but it’s nowhere near time to panic.

Use market downturns to your advantage

One of the best things to come from market downturns is the ability to buy fundamentally great stocks at much cheaper prices. If you’re investing for the long term and buying great companies and funds, sell-offs shouldn’t bother you — they should make you opportunistic. If you’re a believer in a company at $200 a share, seeing it at $100 can be lucrative. It’s a chance to lower your cost basis and increase potential profits when you sell it in the future.

Of course, it’s not always the case that particular stocks rebound, but blue-chip stocks have shown that they’re great businesses and have stood the test of time by making it through some of the worst economic conditions the US has experienced. Long-term investors should be focused on one thing: the long term. Short-term price movements shouldn’t make you anxious if you’re decades away from retirement.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post What history shows us about market downturns appeared first on The Motley Fool Australia.

More reading

• Why is the Bubs share pice toddling higher on Monday?
• Archer Materials share price leaps 7% on patent news
• Why Incitec Pivot, Openpay, PolyNovo, and Sayona Mining shares are sinking
• Ethereum price rout knocks founder from billionaire’s list. Does he still ‘welcome a bear market’?
• Why is the Sayona Mining share price crashing 21% today?

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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The Bubs Australia Ltd (ASX: BUB) share price has been a positive performer on Monday.

In afternoon trade, the infant formula company’s shares are up over 2% to 44.5 cents.

Why is the Bubs share price rising today?

The catalyst for the rise by the Bubs share price on Monday has once again been optimism relating to the company’s prospects in the US market.

As I mentioned here last week, there are shortages of infant formula in the massive US market, which has led to the US Food and Drug Administration (FDA) taking steps to boost supplies.

US FDA Commissioner, Robert M. Califf M.D., commented:

We are also taking a look at the supply of infant formulas developed by manufacturers across the country and around the world to determine if a reallocation of their distribution can be made to help get the right product to the right place, at the right time.

What’s the latest?

This morning, analysts at Citi suggested that Bubs could be a bigger winner from these shortages than larger rival A2 Milk Company Ltd (ASX: A2M).

This is because Bubs launched its Aussie Bubs brand formula range on a number of ecommerce platforms in the country late last year and has since followed this up with listings in a number of supermarkets.

Citi estimates that if Bubs could secure a 1% share of the market, it could result in three to four times upside to the company’s forecast FY 2023 EBITDA.

The broker currently has a buy rating and 59 cents price target on the company’s shares. Based on the current Bubs share price, this implies potential upside of 32% for investors over the next 12 months.

The post Why is the Bubs share pice toddling higher on Monday? appeared first on The Motley Fool Australia.

More reading

• Why did the Bubs share price jump 16% today?
• Which is the better beaten-up buy, Bubs or A2 Milk shares?
• Bubs share price sinks 29% in a month. Top broker tips 60% upside
• 2 great ASX growth shares to buy in May 2022: experts
• Bubs share price sinks 7% despite quarter of ‘exceptional growth’

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended A2 Milk and BUBS AUST FPO. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Archer Materials Ltd (ASX: AXE) share price is surging today on some positive news.

Archer Materials shares are currently up 7.53% to 78.5 cents. In early afternoon trade, the company’s share price soared as high as 13% to 82.5 cents. For perspective, the S&P/ASX All Technology Index (ASX: XTX) has gained just 0.49% at the time of writing.

So what could be impacting the Archer Materials share price today?

Quantum computing chip patent

The Archer Materials share price is surging on news the company has been granted an Australian patent.

The patent is for the company’s 12CQ quantum computing chip and gives Archer exclusive commercial rights to the invention in Australia.

The company said the patent is a “significant early-stage milestone” in the development of the chip.

Commenting on the news, Archer CEO Dr Mohammad Choucair said:

We are excited about the grant of the 12CQ chip Australian patent. Patent protection in major markets is a central element in Archer’s strategy to develop the 12CQ chip.

Obtaining Australian patent approval effectively protects the 12CQ chip technology and prevents others from copying, making, or selling our devices in Australia.

Archer said it is the only company listed on the ASX — and one of only a few global players — developing qubit processor chip technology. The technology could enable quantum processors in mobile devices.

The company now has patents for its technology in Australia, the US, China, South Korea, Japan, and 12 countries in Europe. Commenting further on the Australian patent, Choucair added:

With the focus on quantum technologies in Australia now stronger than ever, we believe that the granting of the Australian patent related to Archer’s 12CQ chip will contribute to strengthening quantum computing and technology innovation in Australia.

Share price snapshot

The Archer Materials share price has climbed more than 16% in the past year but it has lost around 28% in the year to date.

In the past month, the company’s shares have lost almost 10%. However, the Archer Materials share price has surged 15% in a week.

For perspective, the benchmark S&P/ASX 200 Index (ASX: XJO) has returned nearly 2% in the past year.

Archer Materials has a a market capitalisation of about $199 million based on today’s share price.

The post Archer Materials share price leaps 7% on patent news appeared first on The Motley Fool Australia.

More reading

• Why Incitec Pivot, Openpay, PolyNovo, and Sayona Mining shares are sinking
• Ethereum price rout knocks founder from billionaire’s list. Does he still ‘welcome a bear market’?
• Why is the Sayona Mining share price crashing 21% today?
• Should you buy Amazon shares now or wait until after the stock split?
• Is the Webjet share price an opportunity that can soar?

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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In afternoon trade, the S&P/ASX 200 Index (ASX: XJO) is on course to record a small decline. At the time of writing, the benchmark index is down 0.1% to 7,140.6 points.

Four ASX shares that are falling more than most today are listed below. Here’s why they are sinking:

Incitec Pivot Ltd (ASX: IPL)

The Incitec Pivot share price is down over 4% to $3.58. This follows the release of the fertiliser and commercial explosives manufacturer’s half-year results. Incitec Pivot reported a 48% increase in revenue to $2,548 and a record half-year profit of $384 million. As strong as this was on paper, its earnings still fell short of consensus estimates.

Openpay Group Ltd (ASX: OPY)

The Openpay share price is down 10% to 26.5 cents. The catalyst for this was the completion of a placement of shares to sophisticated and institutional investors. Openpay has raised $18.25 million from the placement at an 18.6% discount of 24 cents per new share. It will now seek to raise a further $2 million from retail shareholders at the same price. These funds will be used to accelerate the buy now pay later provider’s pathway to profitability in the ANZ market.

PolyNovo Ltd (ASX: PNV)

The PolyNovo share price is down 7% to $1.23. As I mentioned here earlier, short sellers have been increasing their positions in this medical device company despite its chairman loading up on shares this month. They appear to believe the company’s underperformance will continue this year.

Sayona Mining Ltd (ASX: SYA)

The Sayona Mining share price is down 18% to 23 cents. Investors have been selling this lithium explorer’s shares following the release of a disappointing pre‐feasibility study for the North American Lithium operation in Canada. That study found that the project has a pre‐tax net present value of A$1 billion, which was lower than many were expecting. It also uses long run spodumene price inputs well ahead of what analysts at Goldman Sachs are forecasting.

The post Why Incitec Pivot, Openpay, PolyNovo, and Sayona Mining shares are sinking appeared first on The Motley Fool Australia.

More reading

• Why is the Sayona Mining share price crashing 21% today?
• Why the Openpay share price is sinking 13% to a new low today
• ASX 200 midday update: Elders and Codan rocket, Incitec Pivot disappoints
• Incitec Pivot share price fizzles despite half-year earnings increasing tenfold
• These are the 10 most shorted ASX shares

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended POLYNOVO FPO. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Ethereum (CRYPTO: ETH) price is up 3% since this time yesterday, currently trading for US$2,028 (AU$2,860).

That boost will surely be welcomed by holders of the world’s number two crypto by market cap. But the digital token has a long way to go before recouping the losses it’s posted over the past six months,

So far in 2022, the Ethereum price is down 46%. And it’s lost 59% since the 16 November all-time highs of US$4,892.

While many crypto investors will have lost money on the sharp selloff, which has mirrored the selloff in risk assets like high growth tech shares, only a few will have found themselves reduced to millionaire status from billionaire.

Ethereum price collapse knocks founder from billionaire’s list

The top dogs in the crypto world haven’t been immune to the big price drops.

In fact, the 59% Ethereum price fall since its highs saw Vitalik Buterin tweet, “I’m not a billionaire anymore,” on Friday.

The now 28-year-old Buterin first described the Ethereum blockchain in a 2013 whitepaper when he would have been a teenager. In 2014, he went on to co-found the crypto along with other backers.

As crypto prices soared, so too did Buterin’s wealth. The Age reports that his digital wallet contained US$1.5 billion worth of Ether in November when the token was trading near its highs.

Does Buterin still ‘welcome a bear market’?

In late February, when the Ethereum price had already tumbled from its record highs but was still trading around US$2,790, Buterin made news when he said many crypto professionals would “welcome a bear market“.

According to Buterin (quoted by Bloomberg):

The people who are deep into crypto, and especially building things, a lot of them welcome a bear market. They welcome the bear market because when there are these long periods of prices moving up by huge amounts like it does – it does obviously make a lot of people happy – but it does also tend to invite a lot of very short-term speculative attention…

The winters are the time when a lot of those applications fall away and you can see which projects are actually long-term sustainable, like both in their models and in their teams and their people.

Despite the sharp retrace in the Ethereum price since February (or perhaps because of it), Buterin hasn’t given up on his project.

Following on his admission that he’s off the billionaire’s list, at least for now, he tweeted, “Note to trolls: no, ethereum was not a mistake.”

The post Ethereum price rout knocks founder from billionaire’s list. Does he still ‘welcome a bear market’? appeared first on The Motley Fool Australia.

More reading

• Why Ethereum and Dogecoin are recovering nicely today
• Own crypto or NFTs? Here’s why the ATO could have you in their sights come tax time
• Why is the Ethereum price down 48% this year?
• Why Bitcoin, Ethereum, and Dogecoin are falling today
• Why Bitcoin and Ethereum popped on Tuesday

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Ethereum. The Motley Fool Australia has positions in and has recommended Ethereum. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Sayona Mining Ltd (ASX: SYA) share price has taken a tumble in afternoon trade.

At the time of writing, the lithium explorer’s shares are down 21% to 22 cents.

Why is the Sayona Mining share price sinking?

Investors have been selling down the Sayona Mining share price following the release of an update on the company’s North American Lithium (NAL) operation in Québec, Canada.

Sayona Mining owns 75% of this operation, with Piedmont Lithium Inc (ASX: PLL) owning the balance.

According to the update, the pre‐feasibility study (PFS) found that the operation has a pre‐tax net present value (NPV) of approximately A$1 billion with a life of mine of 27 years, an internal rate of return (IRR) of 140%, capex of A$100 million, and capital payback within two years.

This NPV appears to have fallen well short of what the market was expecting.

What else?

It is also worth noting that this estimate is based on an 8% discount rate with an average spodumene concentrate price of US$1,242 per tonne, and cash costs per tonne of US$590.

However, the pricing used to underpin the NPV could prove to be a touch on the optimistic side, which could also be weighing on the Sayona Mining share price today.

As I mentioned here recently, Goldman Sachs estimates the following for lithium spodumene concentrate prices:

• US$1,750 per tonne in 2023
• US$950 per tonne in 2024
• US$900 per tonne in 2025
• Long run average of US$800 per tonne

Goldman’s long run average spodumene price is almost 36% lower than what Sayona Mining has used for its PFS despite management calling it “conservative.” And while Goldman’s forecasts could ultimately prove inaccurate, they do pose a risk to valuations.

The post Why is the Sayona Mining share price crashing 21% today? appeared first on The Motley Fool Australia.

More reading

• Here’s why the Sayona share price is up 10% today
• Lighting up the market: ASX lithium stocks surge again on Tuesday
• Why are ASX lithium shares off to such a flying start this week?
• Here’s why ASX lithium stocks are rocketing higher today

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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