It's been a wild time for the Lake Resources N.L. (ASX: LKE) share price of late – even wilder than normal. Since 14 November, Lake Resources shares have lost a nasty 11%, going from $1.18 a share to the $1.045 we see today.
But Lake Resources investors wouldn't, or perhaps at least shouldn't, be too surprised. Lake Resources is one of the most volatile shares on the S&P/ASX 200 Index (ASX: XJO). Over the past 12 months alone, Lake Resources has traded between 54 cents and $2.65 a share.
Yes, the company went from its record high of $2.65 that we saw in April this year to the low of 54 cents by July. That's a loss of nearly 80% in just three months or so.
But at today's pricing, Lake Resources shares are up nearly 100% from those lows. So swings and roundabouts all around.
But we digress. So why have Lake Resources shares had such an awful ten days?
Image source: Getty Images
What's been up with the Lake Resources share price?
Well, it's really not clear. Lake Resources has released two pieces of important news during this period, however.
The first was the 14 November notice that the company had issued 400,000 new shares. This was pursuant to the exercise of share options. These were mostly a mix of performance shares and rights, presumably going to members of the management team.
Under the laws of supply and demand, more supply usually results in lower prices, so it's possible that this bulk issuance of new shares has been weighing on the Lake Resources share price ever since.
The second was the notice that Lake Resources has solved a dispute with Lilac Solutions, a technology provider and partner at the Kachi Project in Argentina. This was announced on 21 November this week, but resulted in a significant boost to the Lake Resources share price at the time.
So we can't really blame this for the company's miserly performance over the past ten days.
Thus, we can probably conclude that it is a combination of the new shares, as well as general market volatility, that has given the Lake Resources share price the disappointing ten days that we've recently seen.
But in some good news for investors, ASX broker Bell Potter has recently come out with a speculative buy rating on Lake Resources shares. This ASX broker has a 12-month share price target of $2.53 on Lake shares today, which would result in an upside of another 142% if realised.
