The sudden 55 per cent collapse in a week of much-hyped lithium play Lake Resources has raised questions about the market’s most followed sharemarket benchmark.
shared in the rout amid growing concerns that the spectacular bull run by battery metal shares has pushed the valuations of speculative companies in the sector too high.But the Lake Resources share price implosion was triggered on Monday by the shock announcement, just before the market opened, that managing director Steve Promnitz would quit the company and resign from the board.The following day Mr Promnitz is said to have sold 10.2 million shares netting an estimated $11.
The performance of lithium stock Core Lithium further underlined these concerns. Its value has dropped nearly 30 per cent this week after it also gained index membership on Monday. “I’m over this market. Take me back to late 2021 when an idiot like me was making bank,” said one poster on Reddit as sharemarket trading forums were dominated by discussion of Lake Resources collapse and the departure of its CEO.from shorting shares in a company they believe is overvalued.
But he said the exchange could do more to enforce its own listing rules, noting that Lake permitted the exercise of share options that had expired and had a track record of late and irregular filings of changes in directors’ interests.
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