Down 16% in 3 days: Why is the Lake Resources share price still sliding?

It’s been another brutal day of trading so far this Thursday for the Lake Resources N.L. (ASX: LKE) share price. Lake Resources shares are currently down another 4.35% today to $1.21 a share, a vast underperformance of the S&P/ASX 200 Index (ASX: XJO).

Today’s slide is the third day of losses in a row for this ASX 200 lithium stock. The company has now lost a painful 16% since Monday’s session, including almost 6% just yesterday.

So what’s going on with the Lake Resources share price today?

Well, just like its falls earlier in the week, there’s no obvious explanation. The company hasn’t released any new news or announcements today. In fact, the last price-sensitive ASX release the company put out was the quarterly update from late last month.

But it is worth putting these recent falls in some wider context. Despite the horror week Lake has had this week, its share price remains up by a staggering 93.65% over the past month alone. So there has been a lot of ‘fallback room’ for investors, one could argue.

Additionally, this neck-cracking runup may have prompted the massive increase in short-seller interest we reported on Monday. As we covered at the time, short interest on Lake shares rose to 10.8%. This could have prompted some investors to pull their profits off the table too.

It’s probably a combination of these reasons that have led to Lake Resources shares’ not-so-good, very bad day today, and over this week more broadly. No doubt investors will be hoping for a gentler end to the trading week tomorrow.

At the current Lake Resources share price, this ASX 200 lithium stock has a market capitalisation of $1.7 billion.

The post Down 16% in 3 days: Why is the Lake Resources share price still sliding? appeared first on The Motley Fool Australia.

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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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