RE:RE:RE:Could
furiousmat wrote: "This stock went down 40% [...] without any news or reason [...] It doesn't need any reason to go up again"
With all due respect, this is a terrible way of looking at things. There are reasons why the stock has gone down, and yes, it's gonna need a reason to start going back up.
People on this board need to realize that large investors don't just bet on stocks they think are gonna do good. They try to optimize the return they can get for their money at all time. Right now there is an opportunity cost to having your money stuck in NMX. That's money you could've parked somewhere else to take advantage of other opportunities: the market has been pretty bullish while NMX has sunk.
The company isn't set to start generating any money anytime soon. That means in the short term there is no reason to have money here, bar the fomo on the big news that might catapult the stock higher. It's also an all-or-nothing play until we know the future of the company is assured.
So if you wonder why it keeps going down despite everything looking good, there you have it: there's simply too many better options on the market for it to be worth sitting on NMX for one or two years. People just come to the conclusion that there are better things to do with their money and sell.
I'm of the opinion that this is going to take off at some point. The company has the cash to carry the project, they have serious backing, there's a demand for their product, they have contracts, they're in a stable area. Of course they could face any kind of technical problem and there could be delays... but overall this should be a winner eventually.. Also I expect that at some point during the next year the chilling effect that this shitty Morgan Stanley analysis has had on lithium stock will vanish as people realize that production ramp up isn't a trivial issue and that their prediction for the supply were largely inflated.
But it could still be a long way before there's any durable, significant upside. If for some reason they get stuck in limbo or there's increased doubts (who knows what can happen post election, if Tesla fails, etc.), the stock could keep going down slowly but surely and even enter reverse-split territory somewhere next year. So at the moment nobody should take anything for granted, certainly not start betting on this based on the dubious premise that this might just explode for no reason.
Fully agree with your saying that large investors do not just "bet" on a stock. They do proper due dilligence and if they believe that money can be made they invest, and they invest for the long term, they do not trade! NMX has been able to find such investors putting 1b$ into the company (or actually about 600m$). And this money is there and is not moving "out" of the company. These long term investors do not care about the short term movement of the stock as they have done their homework and know that this is going to be worth $5 a share in about 3 years. So I fully disagree with you when you say that the investors take their money and "park is somewhere else". As an investment NMX is a great opportunity. There are not so many projects that offer a 5x with limited risk. And that is also the reason NMX was able to get the financing done in the first place. And the 600m$ which are truely invested in the company are in very stable hands and will be even long after 2022.
However, besides the loyal long term investors the market is full of disloyal short term traders (traitors?). And the last part of the 1b$ financing were 400m shares at $1 which were mostly released to the market through brokers. And there it depends if the brokers managed to find "investors" or "traders" to take up these 400m shares. Judging by the SP movement since the financing it seems that most shares landed with "traders" and not with "investors". And that is where the downward pressure has been coming from. So IMHO what we have witnessed here is that NMX became a "traders paradise" for all the traders, shorters, hedge funds and what not who can make money as long as there is volatilty. And since the financing the volatilty of this stock has been pretty high.
IMHO it is the 400m shares of the final trance of the financing that are hurting the SP. And the fact that NMX will not earn any money in the next 12-18 months is of course ideal for all the traders. And also the fact that there will not be any "big" announcement which will change NMX. They will in the next 18 months build the mine and if they keep the market informed with nice pictures like PLS.AX and AJM.AX did the SP will slowly but surely move to the $2 level which is the fair value once they are producing and selling the spodumene (end of 2019). The further and furhter the mine develops more and more shares will move into stable long term hands and volatility will reduce. So the SP does not need a "reason" to go up. Visible progress of the mine being build should be more then enough (some nice picutres on twitter and/or instagram like PLS and AJM did and still do should be enough for that).
IMHO the current SP does not say anything about the true value of the company. It is also not a sign that there is something wrong with the company. It is just that there are 400m relatively "new" shares on the market and the "sharks" like to play with the volatily that creates. I completely misjudged this and got in at the $1 level. Could have bought much more for $0.60 but then again in 3 years they will be $5 and I will just laught about this short (pun intended) episode. By the end of 2019 we should be at the $2 level and by the end of 2020 at the $5 level (or with some delay in 2021). For me not, as you write a "long way", but that depends on whether you are a long-term investor or a short-term trader. I am a long-term investor and 18 months is a pretty short timespan to double your money (or if you get in now even tripple). And 30 months (max 42 months) to 5x your money is certainly worth the wait.