Why the Pilbara Minerals (ASX:PLS) share price tumbled 12% in the last week

There has been a sharp pullback from record highs for the largest ASX-listed lithium player.

| More on:
A woman faces the camera with her lip raised up to the side in total confusion.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

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.

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).

Should you invest $1,000 in Allkem right now?

Before you buy Allkem shares, consider this:

Motley Fool investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now... and Allkem wasn't one of them.

The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

And right now, Scott thinks there are 5 stocks that may be better buys...

See The 5 Stocks *Returns as of 30 April 2025

Motley Fool contributor Kerry Sun 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.

More on Share Fallers

A male investor wearing a blue shirt looks off to the side with a miffed look on his face as the share price declines.
Share Fallers

Why Kogan, Monash IVF, OFX, and ResMed shares are falling today

Why are these shares taking a tumble today? Let's find out.

Read more »

A young male investor wearing a white business shirt screams in frustration with his hands grasping his hair after ASX 200 shares fell rapidly today and appear to be heading into a stock market crash
Share Fallers

Why Appen, DroneShield, Gentrack, and New Hope shares are dropping today

These shares are starting the week in the red. But why?

Read more »

A young man clasps his hand to his head with his eyes closed and a pained expression on his face as he clasps a laptop computer in front of him, seemingly learning of bad news or a poor investment.
Share Fallers

Why Dexus, Dusk, Fletcher Building, and Paladin Energy shares are falling today

These shares are ending the week in the red. But why?

Read more »

Couple look at a bottle of wine while trying to decide what to buy.
Consumer Staples & Discretionary Shares

Treasury Wine shares: Buy, hold, or sell? Here's Macquarie's take

What is Macquarie forecasting for Treasury Wine shares amid the CEO’s unexpected exit?

Read more »

A man sits in despair at his computer with his hands either side of his head, staring into the screen with a pained and anguished look on his face, in a home office setting.
Share Fallers

Why Newmont, NRW, Peet, and Treasury Wine shares are dropping today

Let's find out why investors are selling down these shares on Thursday.

Read more »

A male investor wearing a blue shirt looks off to the side with a miffed look on his face as the share price declines.
Share Fallers

Why Aristocrat, EBR, GQG, and Insignia shares are tumbling today

These shares are having a tough time on hump day. Let's find out why.

Read more »

A young man clasps his hand to his head with his eyes closed and a pained expression on his face as he clasps a laptop computer in front of him, seemingly learning of bad news or a poor investment.
Share Fallers

Why Healius, Light & Wonder, REA Group, and Regis Resources shares are falling today

These shares are ending the week in the red. Let's find out why.

Read more »

A man sits in despair at his computer with his hands either side of his head, staring into the screen with a pained and anguished look on his face, in a home office setting.
Share Fallers

Why ANZ, Brainchip, Light & Wonder, and Pilbara Minerals shares are falling today

These shares are tumbling on Thursday. But why?

Read more »