The Pilbara Minerals Ltd (ASX: PLS) share price has tumbled 12.65% from all-time highs of $2.45 last week. At the time of writing, Pilbara Minerals shares are $2.14 apiece.
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Why the sudden pullback from all-time highs?
Altura tranche settlement
Pilbara Minerals acquired the Altura Lithium Project late last year for approximately US$175 million with an upfront cash consideration of US$155 million.
More recently, Pilbara Minerals reached an agreement to pay out the outstanding deferred consideration in shares across two equal tranches.
The first tranche will take place today, with 32.67 million shares issued to former Altura loan noteholders.
The new shares could be a drag on the Pilbara Minerals share price in Wednesday's trading session.
The issuance of almost 33 million shares could dilute existing shareholdings, reducing the ownership proportion of a current shareholder.
Looking beyond the Pilbara Minerals share price
The broader ASX lithium sector has come under selling pressure in the past few days. This is likely driven by factors such as profit-taking and weakness across major indices.
In addition to the Pilbara Minerals share price, large cap lithium players such Orocobre Limited (ASX: ORE) and Mineral Resources Limited (ASX: MIN) have tumbled a respective 8.2% and 6.1% in the past week.
This weakness is also reflected in the Global X Lithium & Battery Tech ETF (exchange-traded fund). That fund invests in the full lithium cycle, from mining and refining to battery production.
The Lithium ETF hit all-time highs of US$87.10 last Wednesday, before sliding 8.45% to US$79.74.
Are lithium prices also falling?
The recent weakness in the Pilbara Minerals share price doesn't align with how lithium prices are tracking.
The latest lithium update from Fastmarkets indicated that "prices in China rose quickly amid restocking activity, while some suppliers held back from sales."
In addition, "lithium spot markets in Europe and the United States were similarly flat due to the traditional summer lull, but trade is expected to pick up next week."
Pilbara Minerals share price snapshot
Pilbara Minerals is still cruising at triple-digit returns in 2021, up 145% year to date.
While it isn't as impressive as its 181% year-to-date return just a week ago, its performance far outshines the broader S&P/ASX 200 Index (ASX: XJO).
