The Syrah Resources Ltd (ASX: SYR) share price is edging higher at last on Wednesday.
In morning trade, the graphite producer's shares are up slightly to $1.25.
Though, they remain down a sizeable 26% since this time last month.
Image source: Getty Images
Why is the Syrah share price falling this month?
There have been a number of catalysts for the weakness in the Syrah share price in recent weeks.
These include the broad market weakness, concerns over an insurgent attack on a nearby mine in Mali, and the sell down of a large shareholder.
In respect to the latter, Copper Strike Limited (ASX: CSE) recently decided to cash in almost a third of its Syrah shares.
According to the release, the mineral exploration company sold 2,642,866 shares (or 28.91% of its holding) in Syrah for an average of approximately $1.75 per share. This resulted in gross proceeds of approximately $4.6 million.
This certainly was great timing. Based on the current Syrah share price, those shares are now worth just under $3.3 million. That's ~$1.3 million less than what Copper Strike received from its sale.
Though, Copper Strike stressed that it believes "the share price of Syrah continues to have considerable long-term potential upside given the accelerating worldwide uptake of electric vehicles and battery storage."
So, why is it selling?
Copper Strike revealed its reasoning for the sizeable sale. It explained:
The Company considered it appropriate to reduce some of the Company's exposure in Syrah given current global market volatility, macro-economic conditions, recent interest rate policy changes in Australia, and the future outlook on global markets by various commentators.
At the same time, Copper Strike is continuing its current strategy in actively seeking project acquisition opportunities, and the Board notes that the proceeds from the partial sale of the Syrah investment is a form of non-dilutive funding that will assist the Company in having the required capital to progress any potential project acquisition opportunities, and also provide funding for general working capital purposes.
