The Li-S Energy (ASX:LIS) share price is still running low. What's happening?

What's gone wrong with Li-S Energy?

asx lithium shares represented by two little wooden peg dolls one with happy face below full battery icon, the other with sad face below empty battery icon

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

It was only a few weeks ago that we were discussing the wildly successful initial public offering (IPO) of the Li-S Energy Ltd (ASX: LIS) share price. This hot battery share hit the ASX boards on 29 September and immediately saw a 174% rise by the end of its first day of trading. The share price soared from the IPO price of 85 cents a share all the way to $2.33 by the end of the day.

The company's second day of life on the ASX boards saw Li-S Energy gain another 3% or so, and even hit $3.05 a share. That's its current all-time high.

But the more recent weeks of Li-S Energy's life haven't been as sweet for investors. Today, this company is currently (at the time of writing) trading for $1.98 a share. At that price, Li-S Energy is now more than 15% from where this company closed at on its first day of trading. And more than 35% from its all-time high of $3.05 a share. Over the past month, the company has lost 15.8%. That's including 10.8% in just the past trading week.

So what's gone wrong for Li-S Energy, the company that so excited investors upon its ASX IPO?

Li-S Energy share price comes under pressure

Well, it's not entirely clear. We did get a quarterly update from Li-S Energy at the end of last month for the quarter ending 30 September. This update informed the markets that Li-S has raised $34 million from its "oversubscribed" IPO. It also stated that the company had $50.5 million in cash and cash equivalents as of 30 September. The company said:

Of this [$50.5 million], $29.1 million is earmarked for project expenditure, plus working capital of more than $16.0 million to fund potential expansion and acceleration of existing projects, commencement of new development projects and the pursuit and engagement in revenue generating opportunities…

It also told investors that "net cash flows used in operating activities during the quarter were $1.8 million".

Further, Li-S Energy gave an update on the "substantial progress" its eponymous lithium-sulphur battery technology has enjoyed over the quarter. According to Li-S Energy, "extended cycle testing" on some of this technology showed batteries "reaching 900 charge/discharge cycles at greater than 60% retained capacity". Additionally, the 'Li-Nanomesh' technology that the company has also been working on has also shown progress.

So it's not entirely clear if this update had any meaningful role in the Li-S Energy share price slide that the company has been enduring in recent weeks. It's possible of course. But it's also possible that investors got a little too excited when this company IPOed and are now letting out some steam.

At the current Li-S Energy share price of $2.01, this company has a market capitalisation of $1.34 billion.

More on Materials Shares

woman holding two phones connected by lead
Materials Shares

Up 46% in one month! Pilbara Minerals shares lead the charge as lithium stocks rally

Are lithium stocks back in vogue?

Read more »

smiling worker stands before power generator technology
Materials Shares

Fortescue shares jump 5% on record performance

This mining giant was in fine form during the quarter.

Read more »

A man casually dressed looks to the side in a pensive, thoughtful manner with one hand under his chin, holding a mobile phone in his hand while thinking about something.
Materials Shares

Should you buy Pilbara Minerals shares today?

Let's see if analysts think investors should be buying the lithium giant's shares.

Read more »

Image of young successful engineer, with blueprints, notepad and digital tablet, observing the project implementation on construction site and in mine.
Materials Shares

Expert says this ASX mining stock could rise almost 30%

Let's see which miner is being tipped as a buy for investors right now.

Read more »

a mine worker holds his phone in one hand and a tablet in the other as he stands in front of heavy machinery at a mine site.
Materials Shares

BHP shares charge higher on record copper and iron ore production

Let's see how the miner performed during the fourth quarter.

Read more »

A man stands with hands on hips surveying construction of three high-rise buildings.
Materials Shares

Building activity on the rise – will ASX materials shares benefit?

New data from the March quarter shows a sharp rise in building activity. 

Read more »

Man smiling at a laptop because of a rising share price.
Materials Shares

Macquarie predicts 11% upside for this ASX materials stock

Here's why the broker is positive on the stock.

Read more »

Miner and company person analysing results of a mining company.
Materials Shares

Rio Tinto share price falls on Q2 update

Let's see what the mining giant reported for the second quarter.

Read more »