Lithium Americas (TSX: LAC) has seen continuous selling over the last month as one of its 10% securities holders apparently looks to liquidate their position in the company. Astoundingly, the company has managed to see its share price continue to rise despite the selling pressure that has been placed on it by the large securityholder.
Bangchak Corporation Public Company Limited, also known as BCP Innovation Pte Ltd, began selling their stake in the company on November 2, 2020. The selling began with a simple 16,000 share transaction for proceeds of US$160,100 at price of US$10.01 per share, before things ramped up over the coming days, with transactions valued at US$508,770, US$928,426, US$2,235,360, US$1,177,054 and US$4,482,453 occurring through to the tenth of the month, providing the equity with little relief from the selling pressure.
The pressure finally relented at the close of markets on November 13, by which point BCP had dropped a total of 2,255,721 common shares of the issuer, providing themselves with gross proceeds of C$30,372,100 based on Sedi and Sedar filings.
The sale of common shares represents a solid gain for BCP, whom originally invested in Lithium Americas in July 2017. At the time, BCP had invested an aggregate of US$113 million in the lithium-focused operator, to provide financing for a portion of the construction costs of the Cauchari-Olaroz lithium project in Argentina. US$33.0 million of the financing was provided via a private placement, while $80 million was via a loan agreement.
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Initially conducted at a price of $0.85 per share within the C$42.5 million financing, on a post-split basis, the company provided funds at C$4.25 per common share. With an average sale price of C$13.46 over the period, representing a gain on the investment of 216.71%. The firms stake meanwhile dropped from 14,154,251 common shares (15.46%) to that of 11,898,530 common shares (13.00%) by the end of these transactions.
Unfortunately for the company and shareholders, the selling wasn’t yet completed.
BCP fired up its sell button roughly a week later on November 19, in a transaction that brought in US$5,003,053, and again provided unrelenting selling pressure on the equity. Five filings later, and the company has sold a further 1,926,028 common shares between the period of November 19 and November 26, raising gross proceeds of C$26,696,073 at an average price per share of C$13.86, a 225.12% gain per share for the firm.
BCP now owns 9,972,502 common shares of the issuer, representing 10.37% of the issuer. What this means, is with just a few more share sales, the company will no longer be required to report its ownership in the company, after which point it’ll be unclear on whether or not they are the source of selling pressure.
It should also be noted that within this time period that Ignacio Celorrio, Executive VP of International Affairs, conducted two sales transactions as well for gross proceeds of $327,060 and $438,650 respectively. The sales were conducted through Philipsburg FN Corp, under which he now holds zero common shares of the issuer. This isn’t uncommon for the issuer however, with August and September seeing two executives drop their ownership in the company to zero shares on multiple occasions.
Lithium Americas last traded at $15.45 on the TSX.
Information for this briefing was found via Sedar, Sedi and the companies mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
