Why is the Lake Resources share price sinking 8% on Wednesday?

The Lake Resources N.L (ASX: LKE) share price has seen better days than today.

Around midday, shares in the lithium exploration company are southbound despite the absence of any news. At present, the Lake Resources market capitalisation is 8.5% lighter than it was yesterday, with a share price of $1.23.

Let’s take a closer look.

Cool your jets

Some investors are calling time on their Lake Resources investment on Wednesday. Though, the lack of announcements from Lake directly suggests there could be other factors at play.

On Monday, we reported on the heightened short interest in Lake Resources shares. The lithium explorer managed to make the top 10 most shorted ASX shares last week, attracting a noteworthy 10.8% short interest.

To give some context, the Lake Resources share price had been on a tear prior to Thursday last week. In the space of less than a month, investors bid the company’s shares up more than 150%. A rewarding return for those lucky shareholders.

Hence, it’s unsurprising that some investors might be opportunistically taking their bags of cash and running for the hills.

Looking at lithium more broadly, the landscape remains relatively unchanged. In fact, S&P Global reported on Friday that industrial-grade lithium carbonate prices had edged higher. Furthermore, Trading Economics shows lithium carbonate prices holding steady at around US$70,500 per tonne.

Lake Resources is slated to report its full-year results on 30 September.

Lake Resources share price in review

Today might look grim for Lake Resources shares, but zooming out, it looks a whole lot better. In the last 12 months, the lithium explorer has notched a gain of 116%. That is a severe outperformance of the S&P/ASX 200 Index (ASX: XJO) and its dismal fall of 5.5%.

However, the mighty return doesn’t coincide with mighty margins. For now, Lake is yet to derive any revenue from operations. In turn, the company recorded a $6.1 million loss for the 12 months ending 31 December 2021.

The post Why is the Lake Resources share price sinking 8% on Wednesday? appeared first on The Motley Fool Australia.

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More reading

• Here are the 3 most heavily traded ASX 200 shares on Tuesday
• Here are the top 10 ASX 200 shares today
• Why is the Lake Resources share price rebounding 5% on Monday?
• Here are the 3 most heavily traded ASX 200 shares on Monday
• These are the 10 most shorted ASX shares

Motley Fool contributor Mitchell Lawler 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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