Why is the Core Lithium share price down 15% in June?

Core Lithium shares have been sold off in June.

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

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 Core Lithium Ltd (ASX: CXO) share price has been sold off this month.

As things stand, the lithium miner's shares are on course to record a 15% decline in June.

This means its shares are now down 52% since hitting a 52-week high of $1.88.

What's going on with the Core Lithium share price this month?

It has been a very quiet month for Core Lithium. In fact, there was not a single announcement out of the miner in June.

This lack of positive news flow could be partly to blame for the weakness in the Core Lithium share price. Particularly for a company that most brokers believe is severely overvalued. With nothing to prop up the share price, it's not hard to see why it was on a downward trajectory.

In addition, short sellers continue to target the company for the same reason. And what a lot of short sellers!

The most recent data out of ASIC shows that Core Lithium is the third most shorted ASX share with approximately 9.3% of its shares held short.

That equates to almost 172.3 million shares with a value of approximately $155 million. That's a lot of smart money betting on the Core Lithium share price falling from current levels. Clearly, they are not messing around.

But how far could they fall?

The team at Citi is arguably the most bearish broker when it comes to Core Lithium.

Its analysts currently have a sell rating and 75 cents price target on its shares. This implies a potential downside of approximately 17% for investors from current levels over the next 12 months.

Food for thought for shareholders.

Citigroup is an advertising partner of The Ascent, a Motley Fool company. Motley Fool contributor James Mickleboro 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 Scott Phillips.

More on Materials Shares

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 »

a man in a hard hat and high visibility vest smiles as he stands in the foreground of heavy mining equipment on a mine site.
Materials Shares

Could these 3 ASX materials shares be set to double?

This broker has buy ratings and aggressive price targets for these holdings. 

Read more »

Man in yellow hard hat looks through binoculars as man in white hard hat stands behind him and points.
Materials Shares

Rio Tinto shares on watch after naming new CEO

The mining giant has found its new leader.

Read more »