Lake Resources (ASX:LKE) shares continue to plummet as investors remain uncertain about the significance of the departure of LKE’s managing director.
After falling over 20% yesterday, LKE continued to slide today.
In late afternoon trade, LKE was down 13%, hovering at around 85 cents a share.
The steep fall means LKE is now down 45% in the last week alone and 65% down from its all-time high registered in April 2022.
Year-to date the lithium stock is down 17% and has plummeted nearly 45% in the last month.
LKE has now surrendered all its 2022 gains and is trading 15% down year to date.
It seems the lithium stocks bull run is well and truly over.
Source: Tradingview.com
Why did he leave: cloud over management reshuffle
Why did he leave?
That’s the question LKE shareholders are pondering ever since Lake buried the lede on Monday and indirectly announced the departure of its long-serving managing director Steve Promnitz.
In an elliptical update, Lake Resources announced that in its shift to serve the North American lithium supply chain, it will appoint chairman Stu Crow as executive chair for six months to oversee the appointment of a new CEO and board members.
Clearly, the pursuit of a new CEO implied the departure of Steve Promnitz.
But Promnitz’s departure didn’t feel like the focus of the update, tacked on to the end of the announcement.
As part of this transition to North America current Managing Director Steve Promnitz will depart after establishing Lake’s dominant position in Argentina.
No elaborations followed except a generic valedictory thank you from chairman Stu Crow.
Why did Promnitz leave? Why now?
LKE’s update didn’t address the questions and the vacuum of certainty prompted many investors to assume the worst.
LKE shares tanked as a result.
The lithium developer noted that further updates on the arrival of new executive and board members will be forthcoming in the coming weeks.
LKE share price: reversion to the mean
Economist Herbert Stein once quipped that if something can’t go on forever, it will stop.
ASX lithium stocks may well be living out Stein’s thesis in real time.
At one point, LKE shares rose as much as 750% in a span of 12 months.
Clearly, that trajectory couldn’t go on forever, especially not for a lithium developer years away from production and many financing obstacles still to overcome.
Plenty of capital has flowed into the lithium sector, raising plenty of lithium stocks along the way.
But while the EV-led theme still underpins favourable demand for the white metal, the easy money is likely already made.
So, where should investors look for an edge?
Are there overlooked, neglected lithium stocks?
If you are interested in lithium stocks, you may want to read Money Morning’s latest research report, which identifies and profiles three overlooked ASX lithium stocks.
Access the report — freely available — here.
Regards,
Kiryll Prakapenka,
For Money Morning
