A number of ASX-listed lithium players have powered ahead in recent times. This comes as investors have been taking advantage of the hype surrounding the lithium revolution.

Indeed, a lot of attention has been turned to the incredible rise in the spot price for lithium.

Over the past year alone, lithium carbonate has rocketed by more than 435% in value.

The battery making ingredient is expected to be adopted across a number of industries, notably the transitioning to electric vehicles.

Lithium is mainly sourced from either spodumene or brine. Australia is home to the majority of the hard rock (spodumene) mines, while brine production is concentrated mainly in South America, particularly Chile and Argentina.

Below, we take a look at which are the top 10 lithium companies on the ASX by market capitalisation.

Who are the ASX’s biggest lithium companies?

According to the ASX, Australia’s largest company that’s involved in the lithium space is Rio Tinto Limited (ASX: RIO).

The mining giant boasts a market capitalisation of $44.46 billion and is one of the biggest companies on the ASX.

Next up, is none other than Mineral Resources Limited (ASX: MIN). The company had an offer price of just 90 cents per share when it floated in 2006. Since then, it has surged to $61.48 at the time of writing, representing an astonishing gain of 5,800%.

Mineral Resources commands a market capitalisation of around $11.62 billion.

Third on the list is Pilbara Minerals Ltd (ASX: PLS) which is valued at $8.48 billion.

As you can see, the top two spots are taken up by companies that are predominately involved with the mining and export of iron ore. Pilbara Minerals on the other hand is the leading ASX-listed pure-play lithium company. It owns 100% of the world’s largest, independent hard-rock lithium operation in the resource-rich Pilbara region.

The following three places on the biggest mining companies list are taken up by Allkem Ltd (ASX: AKE), AVZ Minerals Ltd (ASX: AVZ), and Liontown Resources Ltd (ASX: LTR).

They preside a market capitalisation of $8.48 billion, $4.27 billion, and $3.68 billion, respectively.

The last four spots are covered by Lake Resources NL (ASX: LKE), Sayona Mining Ltd (ASX: SYA), Core Lithium Ltd (ASX: CXO), and De Grey Mining Ltd (ASX: DEG).

The above companies have a market capitalisation of $2.88 billion, $2.76 billion, $2.56 billion, and $1.92 billion, respectively.

Foolish takeaway

In summary, selecting 9 out of 10 of these companies from 12 months ago would have increased your wealth.

Depending on which company you bought into, you could have achieved a gain of up to 800% on your investment. The latter is based on buying Sayona Mining shares which has been the best lithium company amongst the list.

The only company to produce a negative return is Rio Tinto, down 0.3% from this time last year. However, when factoring in the dividend, you would be slightly ahead.

The post What are the 10 biggest ASX shares in the lithium space appeared first on The Motley Fool Australia.

More reading

• ASX 200 midday update: Ramsay rockets and Rio Tinto disappoints
• Rio Tinto share price falls on weak Q1 update
• How does the Fortescue dividend compare to its sector?
• Here are the top 10 ASX shares today
• Can the Rio Tinto share price break its all-time high in 2022?

Motley Fool contributor Aaron Teboneras 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 Bruce Jackson.

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The Coles Group Limited (ASX: COL) share price is in the green today after the company launched a new carbon-neutral beef product.

Coles shares are swapping hands at $18.64, up 1.64%. In comparison, the Woolworths Group Limited (ASX: WOW) share price is 0.88% higher. Both companies are outperforming the S&P/ASX 200 Index (ASX: XJO) which is up 0.29% at the time of writing.

Let’s take a look at what Coles announced today.

New beef range

Coles launched a new carbon-neutral beef range known as Coles Finest Certified Carbon Neutral Beef.

This includes seven premium quality beef cuts, ranging from eye fillet to porterhouse steaks. The beef range is available in Coles Victoria shops this week and will be rolled out across the country in the next 12 months.

The beef is certified as meeting the requirements of the federal government’s Climate Active Carbon Neutral Standard.

Commenting on the news, Coles CEO Steven Cain said:

When we announced our sustainability strategy just over a year ago, we said we’d work with all our stakeholders to achieve our Together to Zero emissions ambitions and to be Australia’s most sustainable supermarket

Coles Finest Certified Carbon Neutral Beef is a testament to the hard work of our beef producers and their commitment to sustainable practices, and we’re thrilled that they’re taking this important step with us.

Coles said it has been working with beef farmers in Victoria and New South Wales to reduce their carbon output. This has led to emissions that are 19% less than the national average.

In other company news, Coles has recently been named as an ASX dividend share to buy now. Morgans is predicting Coles to provide fully franked dividends of 61 per share in FY2022. In FY2023, the broker can see Coles delivering a 63 cent dividend. Morgans has a $19.70 price target on Coles shares, a 5.7% upside on the current share price.

Coles share price snapshot

The Coles share price has gained nearly 20% in the past 12 months while it is up nearly 4% this year to date.

In contrast, the benchmark ASX index has returned about 8% in the past year.

Coles has a market capitalisation of about $24.9 billion based on the current share price.

The post Why is the Coles share price in the green today? appeared first on The Motley Fool Australia.

More reading

• Analysts name 2 ASX dividend shares to buy now
• 2 strong ASX 200 dividend shares analysts love
• Why is the Coles share price slipping today?
• Top ASX dividend shares to buy in April 2022
• ASX market beater? Here’s how Coles shares performed during March

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns and has recommended COLESGROUP DEF SET. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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A disappointing first-quarter result from Netflix Inc (NASDAQ: NFLX) has sent the share price off a cliff in after-hours.

Following the closing bell, shares in the world’s largest streaming platform fell unceremoniously. The response to Netflix’s first-quarter result played out in the destruction of US$40 billion of market capitalisation as the stock crashed 25.7% to US$258.90.

The main culprit behind the negative reception appears to be a key metric that left investors shocked.

Is the growth story coming undone for Netflix?

Unfortunately for the Netflix share price, the latest quarterly result left the market wondering whether the ‘N’ in “FAANG” stocks has lost its bite.

Standing out like two sore thumbs were the revenue miss and, more notably, the net subscriber miss. Firstly, analysts had expected US$7.95 billion in revenue for the streaming giant but were given US$7.87 billion.

However, it was the 200,000 net subscriber reduction signalling alarm bells in after-hours. Prior to the result, analysts were forecasting an increase of 2.51 million subscribers during the quarter. Obviously, the stark contrast has created concerns among investors.

$NFLX pic.twitter.com/bL2R10MHg8

— Alex Morris (TSOH Investment Research) (@TSOH_Investing) April 19, 2022

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The fall in net subscribers has attracted plenty of attention, being the end of a decade-long stint for subscriber growth at Netflix. As such, the unwelcomed milestone has prompted a dramatic correction in the Netflix share price.

To its credit, the company had no trouble admitting the streaming industry is becoming a competitive space. What was once Netflix and a few smaller rivals has exploded into countless offerings; as traditional media adopts what has now become a relatively established technology.

What else is playing on the Netflix share price?

Netflix highlighted that the near-term outlook is unlikely to see much of an improvement.

For example, Q2 FY22 forecast shows revenue growth slowing again to 9.7% year on year — hitting US$8.05 billion. Meanwhile, net subscriber count is set for an even uglier fate, with expectations of a further 2 million exodus.

If the Netflix share price opens at its after-hours level tonight, shares will be down ~57% so far this year.

The post Here’s why the Netflix share price is plunging 25% in after-hours trading appeared first on The Motley Fool Australia.

More reading

• Netflix investors could be in for a shocker this week
• Why Netflix could be a buy in the coming weeks
• 3 reasons to buy Netflix, and 1 reason to sell

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. owns and has recommended Netflix. The Motley Fool Australia has recommended Netflix. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Shares in Betmakers Technology Group Ltd (ASX: BET) were placed in a trading halt by the company before the market open today pending an announcement.

The move follows media reports that News Corporation (ASX: NWS) has joined a consortium that intends to launch a new online sports betting company in Australia.

According to the Wall Street Journal, owned by News Corp, unnamed sources familiar with the matter say the consortium intends to use Betmakers technology to power the new business.

Before the news broke, the Betmakers share price rose by almost 5% yesterday to finish the day at 65 cents. Betmakers will remain in a trading halt until either the announcement is made or Friday’s market open.

Just in time for Spring carnival racing

The report said a Las Vegas digital sports gambling investment company Tekkorp Digital (NASDAQ: TEKKW) and Australian industry executive Matthew Tripp are working with News Corp to establish the new business. It has a working name of BetR.

The consortium is apparently preparing to announce the new company this week. They hope to launch the product in time for the Australian Spring horse racing season, which starts in late August.

Betmakers share price summary

As my Fool colleague James reported yesterday, Betmakers is currently among the top 10 most shorted shares on the ASX. Investors appear to be concerned over its valuation and cash burn.

The Betmakers share price is down 22% year to date and 48% over the past 12 months.

The post Betmakers share price halted amid reports of major News Corp deal appeared first on The Motley Fool Australia.

More reading

• The Betmakers share price is surging 6% on Tuesday. Could this be why?
• These are the 10 most shorted ASX shares
• These are the 10 most shorted ASX shares
• These are the 10 most shorted ASX shares
• Why is the Betmakers (ASX:BET) share price having such a lousy week?

Motley Fool contributor Bronwyn Allen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Betmakers Technology Group Ltd. The Motley Fool Australia has recommended Betmakers Technology Group Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Big River Gold Ltd (ASX: BRV) share price is skyrocketing today after the company announced an all-cash takeover offer from multinational mining company Aura Minerals Inc (TSE: ORA).

Big River Gold is a minerals explorer whose main focus is its 100%-owned Borborema Gold Project in Brazil. The mine has a resource of 2.43Moz of gold.

Aura is offering to buy Big River Gold for 36 cents per share. That’s a 33% premium on yesterday’s closing price of 27 cents. ASX gold investors have wasted no time bidding up the company’s shares this morning to cash in on the arrangement. While it’s not a done deal yet, all Big River Gold directors and two major shareholders representing almost 40% of the vote have declared they’ll be voting yes to the buyout.

At the time of writing, the ASX gold share is trading at 34.5 cents, up 27.78%.

‘Vote yes’, says Big River Gold management

So first, here’s the nitty-gritty. Big River Gold has executed a binding scheme implementation deed with Aura proposing that Aura subsidiary Aura BidCo will acquire 100% of Big River Gold by way of a scheme of arrangement between the ASX gold share and its shareholders.

Big River Gold’s independent board committee is recommending shareholders vote in favour of the deal unless a superior offer is made, subject to an independent expert confirming it’s in the best interests of investors.

The key highlights are as follows:

• The offer of 36 cents per share represents a premium of 30% to the 30 trading day VWAP [volume weighted average price] of 27.7 cents per share; 42.3% to the 60 trading day VWAP of 25.3 cents per share; and 44% to the 90 trading day VWAP of 25 cents per share
• The scheme consideration values Big River’s diluted equity at approximately $91.7 million
• Each Big River Gold director intends to vote in favour of the deal
• The deal is subject to various conditions, including approval from ASIC and shareholders

Major shareholders give the thumbs up

Two major investors in the ASX gold share have indicated their intention to vote in favour of the buyout.

Canadian investment company Dundee Resources Limited (voting power 19.3%) plans to vote yes and will likely receive unlisted shares in Aura BidCo in lieu of the cash consideration.

Australian private investment company Copulos Group (voting power 18.8%) has signed a voting intention statement saying it will vote in favour of the takeover, subject to certain conditions.

The scheme meetings are expected to be held in early to mid-July, with implementation to follow in July or August.

If the scheme proceeds, Big River Gold will become a subsidiary of Aura. It will be delisted from the ASX and held under a joint venture between Aura and Dundee.

Big River Gold has appointed NextLevelCorporate as its financial advisor and MinterEllison as its legal
advisor. Shareholders will receive a scheme booklet in June and will likely vote on the takeover in July.

Big River Gold share price recap

The ASX gold share has a 52-week high price of 42 cents per share. It was swapping hands at that level back in May last year. The share price has drifted down over the past 12 months by almost 18%.

The post This ASX gold share is surging 27% on takeover news appeared first on The Motley Fool Australia.

More reading

• Why has the Newcrest share price gained 11% in a month?
• Why are ASX 200 travel shares taking off on Wednesday?
• Why are Webjet shares still among the most shorted on the ASX
• Here’s why the Soul Patts share price is getting whacked today
• Faults and financials: Why is the AGL share price getting zapped 6% today?

Motley Fool contributor Bronwyn Allen 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 Bruce Jackson.

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The Newcrest Mining Ltd (ASX: NCM) share price has surged in the last month, nearing its 52-week high of $29.27.

Since 20 March, the gold miner’s shares have gained around 10.8%, making it one of the best performers across the sector. In comparison, the share price of fellow miner Northern Star Resources Ltd (ASX: NST) increased by 5.8% across the same timeframe.

At the time of writing, Newcrest shares are taking a slight breather to swap hands at $28.77, down 0.24%.

What’s driving the Newcrest share price higher?

It seems the acceleration in the price of gold has boosted investor sentiment. Traditionally, investors flock to the yellow metal as a safe-haven asset when there is uncertainty in the market.

While the world is slowly moving past COVID-19, the war between Russia and Ukraine has sparked a gold rush.

Last month, the price of gold soared above the US$2,000 barrier but has since fallen a touch under. At the time of writing, gold is fetching US$1,946 an ounce.

Compared to 20 March, the precious metal had been priced at around US$1,920. This represents an increase of about 1.3% over the 30-day period.

Accordingly, Newcrest shares have also risen from $25.97 a month ago to today’s price of $28.77.

It’s worth noting that the price of gold spiked to an all-time high of US$2,072.90 on 7 August 2020. Newcrest shares closed at $33.27 on the day.

You may be wondering why the company’s share price is nowhere near the level it was in 2020, given the price of gold is almost the same.

This is because of other macroenvironmental factors, such as the United States Federal Reserve’s intent on lifting interest rates this year. It noted that inflation accelerated to 6.9% in the US, the highest rate in nearly four decades.

Following its lead, the Reserve Bank of Australia signalled its move with two expected rate hikes for 2022.

Rising interest rates can drag down the price of precious metals and it appears investors are mixed on these impacts for the moment.

What do the brokers think?

A number of brokers rated the Newcrest share price with different price points in late March.

The team at UBS cut its outlook on the company’s shares to “neutral” from “buy”. However, the broker raised its 12-month price target by 2.3% to $27.10.

Based on the current share price, this implies a potential downside of 6% for investors.

On the other hand, Morgan Stanley analysts reduced their rating on Newcrest shares by 1% to $33.70. They believe the company’s shares still have some room to bounce higher.

This implies a potential upside of 17% from where Newcrest shares trade today.

The post Why has the Newcrest share price gained 11% in a month? appeared first on The Motley Fool Australia.

More reading

• Here are the top 10 ASX mining companies by market cap
• How is the Newcrest share price tracking in 2022?
• 5 things to watch on the ASX 200 on Monday
• 5 things to watch on the ASX 200 on Friday
• Yield curve inversion is bad news for ASX shares except for this sector

Motley Fool contributor Aaron Teboneras 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 Bruce Jackson.

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ASX 200 travel shares are climbing today after US travel shares rallied overnight.

The Flight Centre Travel Group Ltd (ASX: FLT) is up 2.53% at the time of writing, while Webjet Limited (ASX: WEB) is 2.41% in the green. Meanwhile, the Qantas Airways Limited (ASX: QAN) share price is 0.74% higher.

Let’s take a look at what could be impacting ASX travel shares today.

US travel shares rebound

ASX 200 travel shares are following in the footsteps of their US counterparts today. The Delta Air Lines, Inc (NSE: DAL) share price climbed 2.16%, American Airlines Group Inc (NASDAQ: AAL) surged 5.66% while United Airlines Holdings Inc (NASDAQ: UAL) jumped 4.5% in the US on Tuesday.

These shares surged after a Florida court struck down the mask mandate on planes. Airlines were quick to respond to the ruling, although it is still subject to a possible appeal from the US government.

Falling oil prices may also have impacted both ASX 200 and US travel shares. Fuel is a major operating cost for airlines. WTI crude oil prices dropped 5.2% overnight and Brent crude oil dropped 5.1%.

However, oil prices are now recovering, with Brent Crude up 1.04% to US$108.37 a barrel while WTI crude oil is 0.92% higher to US$103.50 a barrel.

Closer to home, travel rules have recently been relaxed for overseas arrivals. As of Monday 18 April, international arrivals into Australia are no longer required to undertake a COVID-19 test before their departures. Cruise ships are also now able to arrive in Australia.

An Easter holiday travel boom saw the Gold Coast at its busiest since 2019, the ABC reported.

Gold Coast holiday apartment manager Marion Simon told the publication:

It’s got that vibe again — the restaurants are full, the people are happy, the guests have been absolutely amazing. We are literally 100 per cent full.

New Zealand opened its borders to Australian travellers last week, providing another boost for ASX 200 travel companies.

ASX travel share recap

Flight Centre shares have surged 24% in the past year, while Webjet shares have jumped 15%. In the last year, Qantas shares have also risen 8%.

In comparison, the benchmark  S&P/ASX 200 Index (ASX: XJO) has climbed about 8% in a year.

The post Why are ASX 200 travel shares taking off on Wednesday? appeared first on The Motley Fool Australia.

More reading

• Why are Webjet shares still among the most shorted on the ASX
• Qantas share price slides following Easter travel woes
• Here are the 5 best performing ASX travel shares of 2022 so far
• The Webjet share price has dropped 9% in six months. Is now the time to pounce?
• These are the 10 most shorted ASX shares

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 Flight Centre Travel Group Limited and Webjet Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Webjet Limited (ASX: WEB) share price has continued to move in circles since the start of 2022.

This follows the company’s relatively quiet period with its last price-sensitive announcement reporting its half year results.

While the online travel agent’s company’s shares have risen 14% year to date, it’s still down from November 2021 levels.

At the time of writing, Webjet shares are up 1.55% to $5.90.

Webjet shares in top 10 open ASX short positions

The negative investor sentiment on the Webjet share price can be attributed to the sluggish recovery of the travel market. This has ultimately attracted a large number of short-sellers to the company’s registry.

Short-selling is a common trading strategy that aims to profit from the fall in the price of a security. The goal is for an investor to borrow shares and sell the shares, and then buy them back at a lower price for a profit.

On 11 April, the Australian Securities & Investments Commission (ASIC) released its short position report revealing the level of short interest within companies.

As such, Webjet remained in the top 10 list with 10.54% of its shares being heavily shorted by investors.

In comparison, the government body had a short interest of 7.87% in Webjet at the start of the calendar year.

Given the large increase in short positions being taken up, it appears investors believe the company’s performance could be underwhelming.

Webjet is scheduled to release its FY22 full year results within the next five weeks.

What do the brokers think?

A couple of brokers have rated the company’s share price with varying price points over the last week.

The team at Citi raised its view on the company’s outlook to “buy” from “neutral” on Webjet shares. It also lifted its 12-month price target by 0.6% to $6.50. This implies a potential upside of 10% for investors.

On the other hand, analysts at Macquarie put out a more bearish tone, slashing its rating by 4.9% to $5.80. It seems the broker considers that the company’s shares are overvalued for the time being. Based on the current Webjet share price, this implies a downside of around 2%.

Webjet share price summary

Over the past 12 months, the Webjet share price has risen by about 14%.

In comparison, the Flight Centre Travel Group Ltd (ASX: FLT) share price has gained 22% across the same time frame.

Webjet presides a market capitalisation of about $2.24 billion and has approximately 380.51 million shares outstanding.

The post Why are Webjet shares still among the most shorted on the ASX appeared first on The Motley Fool Australia.

More reading

• Here are the 5 best performing ASX travel shares of 2022 so far
• The Webjet share price has dropped 9% in six months. Is now the time to pounce?
• These are the 10 most shorted ASX shares
• These were the best performing ASX 200 shares last week
• ASX 200 travel shares had a super day. What’s happening?

Motley Fool contributor Aaron Teboneras 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 Webjet Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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It’s been a rather pleasant day of trading for the S&P/ASX 200 Index (ASX: XJO) so far this Wednesday. At the time of writing, the ASX 200 is up a pleasing 0.34% or so at just under 7,600 points. But that sentiment is seemingly not filtering through to the Washington H. Soul Pattinson and Co. Ltd (ASX: SOL), or Soul Patts, share price.

Soul Patts shares are currently well in the red today, despite the green of the broader market. At the present time, this ASX 200 conglomerate is trading at $28.55 each, a good 0.87% down from the $28.82 price the company closed at yesterday.

Soul Patts share price falls as company trades ex-dividend

So why are Soul Patts shares underperforming the market so convincingly today? Well, the answer is simpler and more pleasant than one might think. Today marks the occasion of Soul Patts’ latest ex-dividend date. Yes, the company has just traded ex-dividend for its upcoming interim shareholder payment.

This means that from today, no new Soul Patts investors are eligible to receive the company’s latest dividend. Because this payment is now effectively lost for new investors, its value has left the Soul Patts share price. That is almost certainly why we are seeing the company’s shares seemingly bucking the markets today.

Any investor who bought into Soul Patts before today’s trading though can look forward to the company’s latest interim dividend, which will be paid out on 13 May. This dividend will be worth 29 cents a share, fully franked.

This represents a healthy 11.5% rise on last year’s interim dividend of 26 cents per share. But this might not come as a surprise to any long-term investor in Soul Patts. This company is famous for its two-decade-long streak of giving investors an annual dividend pay rise. Indeed, Soul Patts has been increasing its annual dividend like clockwork every year since 2000.

At the current Soul Patts share price, this ASX 200 share has a dividend yield of 2.28%.

The post Here’s why the Soul Patts share price is getting whacked today appeared first on The Motley Fool Australia.

More reading

• Keen to bag the Washington H Soul Pattinson dividend? Read this
• 2 defensive ASX dividend shares for long-term income
• Top ASX dividend shares to buy in April 2022
• Why has the Washington H. Soul Pattinson share price leapt 13% in 3 weeks?
• These are 2 of the most diversified ASX 200 shares

Motley Fool contributor Sebastian Bowen owns Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns and has recommended Washington H. Soul Pattinson and Company Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The lights are low on the AGL Energy Limited (ASX: AGL) share price today after news of an outage at the Loy Yang power station.

Following the announcement this morning, shares are down the most of any company in the S&P/ASX 200 Index (ASX: XJO). In specific terms, the AGL share price is down 6.2% to $8.25 as we head into the afternoon.

Outage creates a headache for more than just shareholders

Prior to the market opening this morning, one of Australia’s largest energy retailers announced that a problem had occurred at the Loy Yang A power station in Victoria. This is a coal-fired power station responsible for supplying around 30% of the south-eastern state’s electricity.

According to the release, one of the generators at Loy Yang has been taken out of service due to an electrical fault. The details surrounding the cause of the fault are currently under investigation by the company.

At this stage, AGL is uncertain of how long the generator may be out of action. However, the utility giant has made the Australian Energy Market Operator aware that it could be until 1 August 2022. Although, a caveat was given that this estimate is subject to change as the situation develops.

While the immediate pain is being felt by shareholders, with the AGL share price falling today, the fault could create an issue for Victoria’s electricity supply.

Losing the generator means the Loy Yang power station is down a quarter of its typical capacity. With the winter peak period just around the corner, mitigating the shortfall in electricity supply could present its own challenge.

What else could be hurting the AGL share price?

Recently, AGL Energy completed a seven-year-long endeavour to upgrade the systems at Loy Yang A. This undertaking required $60 million to ensure the power station is equipped to see out the rest of its tenure.

In February, the company made its intentions clear that it wants to close Loy Yang A earlier than previously guided. In turn, the coal-powered plant is now slated for shutdown no later than 2045. Yet, that date remains more than 20 years into the future.

Ultimately, today’s electrical fault could have shareholders nervous about the capital needed to keep Loy Yang A operational in future years. As such, market participants are going cold on the AGL share price today.

Lastly, the company stated it will provide an update with any financial impact once more is known.

The post Faults and financials: Why is the AGL share price getting zapped 6% today? appeared first on The Motley Fool Australia.

More reading

• ASX 200 midday update: Ramsay rockets and Rio Tinto disappoints
• Why is the AGL share price having such a stellar start to the week?
• AGL share price in the green amid ‘virtual battery’ deal
• What was the highest ever AGL Energy share price?
• Rain or sunshine for ASX renewable shares in the March quarter?

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 Bruce Jackson.

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