Why did the Lake Resources share price rocket 40% in August?

The Lake Resources NL (ASX: LKE) share price took off last month.

After closing the final session of July at 81 cents, stock in the S&P/ASX 200 Index (ASX: XJO) lithium favourite ended yesterday’s trade at $1.17. That marks a 44.4% improvement.

For context, the index lifted 0.6% over the month of August.

Interestingly, the stock’s surge came despite the company’s silence. The last time the market heard price-sensitive news from the company was in late July.

So, what’s been driving the Lake Resources share price lately? Let’s take a look.

What went right for the Lake Resources share price?

To really delve into what went right for Lake Resources stock last month, one must look to the company’s recent struggles. Notably, a short attack launched against the company in July.

A report issued by short-seller J Capital claimed the company’s flagship Kachi Project wouldn’t reach production by 2024 as planned. It also alleged direct lithium extraction technology intended to be used at the project won’t work the way the company claims it will.

Lake Resources disputed the allegations. It said the short seller was, incredibly, critiquing the wrong technology.

But its clap back didn’t stop its short position rocketing to a high of 10.8% early last month. That’s since dipped slightly, falling to 10% as of the most recent data available.

Looking even further back, the stock plummeted 49% in June amid a broader lithium sell-off.

Thus, despite its recent gains, the Lake Resources share price is still 24% lower than it was at the end of May and just 7% higher than where it started 2022.

Comparatively, its fellow ASX 200 lithium shares, Core Lithium Ltd (ASX: COR) and Pilbara Minerals Ltd (ASX: PLS) have respectively gained 122% and 4% year to date.

It’s also worth pointing out there was major news from many of Lake Resources’ ASX 200 peers last month.

Core Lithium dropped news of lithium and gold findings and Pilbara Minerals posted its maiden profit. Meanwhile, Allkem Ltd (ASX: AKE) dropped record full-year results and Sayona Mining Ltd (ASX: SYA) released good news about its North American Lithium operation’s anticipated production.

All these updates may have helped boost sentiment for the Lake Resources share price.

The post Why did the Lake Resources share price rocket 40% in August? appeared first on The Motley Fool Australia.

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More reading

• These were the best performers on the ASX 200 in August
• Here are the top 10 ASX 200 shares today
• Here are the top 10 ASX 200 shares today
• Could this give some ASX lithium shares the edge?
• Why did the Lake Resources share price plunge 10% today?

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 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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