A tragedy for many at both ends of the pendulum

ASX listed lithium hopeful, Core Lithium (CXO:ASX) raised $100m in August ’23, pricing the offer at 40 cents

Prior to this, in October 2022, it raised $100m with investors paying $1.03 per share.

Today, the stock is trading at 27 cents.

Even those who have held the stock since the August 2021 $91m raise at 31 cents are underwater.

Also today, Citi research analysts have downgraded the equity of Core Lithium to a “Sell” rating.

I don’t recall any suggestions to Sell appearing when the stock was trading at $1.10, $1.30 or a $1.50 per share.

The mind boggles !

and similar fate awaits those investors who paid 25 cents and still holding shares from the $40m capital raising conducted during February 2021.

More investors may yet throw their stock away.

The silver lining without implying that I have conducted any research; is that company may have all the money it needs in the near-term and is possibly ‘all dressed up for the dance’.

But perhaps we should spare a thought for those you paid $1.03 per share, only a year ago?

It’s an illustration of poor decision making at both ends of the pendulum by the various parties involved in the investing and capital markets.

This sort of capital and equity damage can be found the world over.

It’s also a reminder that the mining business is difficult and it highlights the importance of separating the euphoria of a theme and the valuation of any intended investment.

December 1, 2023

by Rob Zdravevski

rob@karriasset.com.au