Why is the Lynas share price down 25% in a month?

The Lynas CEO exercised some performance rights this week, picking up almost 150,000 shares.

| More on:
Man with his head on his head with a red declining arrow and A worried man holds his head and look at his computer as the Megaport share price crashes today

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

Key points

  • The Lynas share price has reset its 52-week low seven times this month, dipping to $6.18 per share yesterday 
  • Internal and external factors have pulled the ASX rare earths stock down since early February 
  • CEO Amanda Lacaze exercised some performance rights on Wednesday, acquiring almost 150,000 Lynas shares 

The Lynas Rare Earths Ltd (ASX: LYC) share price has lost a quarter of its value over the past four weeks.

The ASX rare earths share finished the session on Friday at $6.33, up 0.64% for the day.

A month ago it was trading around the $8.50 mark.

So, what's happened?

Why is the Lynas share price tumbling?

Created with Highcharts 11.4.3Lynas Rare Earths Ltd PriceZoom1M3M6MYTD1Y5Y10YALL0www.fool.com.au

The Lynas share price has reset its 52-week low seven times this month.

The newest low came yesterday when Lynas shares dipped to $6.18 in intraday trading.

Lynas' fall began in early February when it was trading up around the $9.70 mark.

There has been a series of challenges.

In early February, Lynas' Malaysian licence was renewed, but with an environmental condition that means Lynas will have to close its cracking and leaching plant at the end of FY23 if it can't get an exemption.

The company has launched an appeal and time will tell us the outcome.

In late February, Lynas revealed a 32% cost increase in its 1H FY23 results, which of course the market didn't like. Down the Lynas share price went.

A few days later, electric vehicle (EV) giant Telsa Inc announced it won't use rare earths in its next-generation electric vehicles.

The market panicked, sending ASX rare earths shares tumbling. The Lynas share price dropped 6.8%.

Many experts said this was an overreaction, but as we all know, that sort of thing is common in markets! Negative sentiment and confusion can easily send share prices south.

What else is going on for Lynas?

The only price-sensitive news out of Lynas this month is actually positive. The company reported a $200 million investment by the Japanese Government on 7 March.

Not much else is going on, although yesterday Lynas did update the ASX on the holdings of its CEO Amanda Lacaze.

The notice revealed that Lacaze exercised some performance rights on Wednesday. This resulted in the acquisition of 147,433 Lynas shares through her family trust.

Motley Fool contributor Bronwyn Allen has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Tesla. 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 Scott Phillips.

More on Materials Shares

A group of miners in hard hats sitting in a mine chatting on a break as ASX coal shares perform well today
Materials Shares

Down but not out: Can these ASX mining shares bounce back?

Here’s what one broker is predicting for Australia’s largest mining companies. 

Read more »

Broker analysing the share price.
Materials Shares

Buy, hold, or sell? Broker's verdict on 3 ASX 200 materials shares

Materials was one of four market sectors that weakened in overall value in FY25.

Read more »

A man holds his head in his hands, despairing at the bad result he's reading on his computer.
Materials Shares

Why is this ASX mining stock crashing 14% today?

Let's see what is causing investors to hit the sell button on Monday.

Read more »

Three miners stand together at a mine site studying documents with equipment in the background
Materials Shares

$10,000 invested in BHP shares in FY25 is now worth

Did the Big Australian outperform or underperform during the last financial year?

Read more »

A male investor sits at his desk pondering at his laptop screen with a piece of paper in his hand.
Share Market News

Why did Macquarie just downgrade Liontown resources shares?

Here’s what the broker had to say about this materials company. 

Read more »

A man holds his head in his hands, despairing at the bad result he's reading on his computer.
Materials Shares

Why did Macquarie downgrade Mineral Resources shares?

The broker is no longer bullish on this mining and mining services company.

Read more »

A bricklayer peers over the top of a brick wall he is laying with a level measuring tool on top and looks critically at the work he is carrying out.
Materials Shares

Brickworks shares rise 1% on trading update

Investors seem delighted by a new update from Brickworks.

Read more »

A man wearing a shirt, tie and hard hat sits in an office and marks dates in his diary.
Materials Shares

Does Macquarie prefer Rio or BHP shares today?

Let's find out which mining giant is the better pick right now according to the broker.

Read more »