Why did Lake Resources stock price drop 17% in one week?

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The Lake NL Resources (ASX: LKE) The stock price fell 17.4% this week between the close of trading on September 23 and today’s press time.

This is considerably more than the loss displayed by the S&P/ASX 200 Materials Index (ASX:XMJ), which was down just 1.41% over the same period.

Other ASX lithium stocks are also down during this time, including Pilbara Minerals Ltd (ASX:PLS), which is down 8.7% in value. Allkem AG (ASX:AKE) also took a beating, losing 12.7%.

During this time, the S&P/ASX 200 Index (ASX:XJO) lost 3.29%.

There is no company news to make sense of Lake Resources’ share price decline. However, some developments in the market have unfolded. Let’s cover the highlights.

What’s going on with the Lake Resources stock price?

On Monday, the Motley Fool reported that Lake Resources was among the ten most short-sold stocks on the ASX, with a short interest rate of 9.9% at the time of publication.

This follows an early September insight from research firm J Capital into why Lake Resources’ share price could be targeted by short sellers. He claimed Lake Resources’ Direct Lithium Extraction (DLE) technology is unproven and may not produce lithium in the clean way the company expected, potentially producing toxic waste. in place.

Although my colleague James notes that Lake Resources has refuted J Capital’s claims, that negative commentary may still have a grip on the company’s stock price as it tumbles to lower levels this week.

More broadly, Lake Resources and other lithium stocks could feel the bite of the prospect of an even bigger interest rate hike, as well as the possibility that a “soft landing” may not occur as it does. the Fed hopes.

My fellow Fool, Tristian, notes that these and other headwinds could culminate in a maelstrom of volatility that we have witnessed over the past week.

Lake Resources Stock Price Overview

The company’s shares are currently trading at 87.5 cents each. Earlier in the day, shares hit an intraday high of 90 cents and a low of 87 cents.

Lake Resources’ share price is down 13.12% year-to-date. Meanwhile, the ASX 200 fell 12.96%.

The market capitalization of the company is approx. $1.22 billion.

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