Why has the Li-S Energy (ASX:LIS) share price dropped 23% since its ASX IPO?

Li-S Energy has had an interesting time since its IPO…

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Late last month, we covered the explosive initial public offering (IPO) of Li-S Energy Ltd (ASX: LIS). The battery tech company initially floated on the ASX boards at a share price of 85 cents. But soon after its first hour or two of trading, this company had ballooned as high as $3.05 a share. That was an intra-day gain of roughly 260% for the Li-S Energy share price. Incredible stuff.

So how has this exciting company fared in the days and weeks that have followed this attention-grabbing ASX IPO debut?

Well, the Li-S Energy share price has certainly gone back to what could be described as ‘normal behaviour’ for an ASX share. Over the past 3 weeks, we have seen Li-S Energy bounce around a fair bit. A few days after its IPO, Li-S shares gave up much of their initial gains, and hit a low of $1.82 a share on 1 October.

By the following week though, Li-S Energy was back up at $2.41 a share. After another dip last week which saw the company fall to $2.11, this week has seen the company move back upwards again. As it stands today, Li-S Energy has closed at a price of $2.34 a share, up 4.46% for the day. That happens to be the share price it closed last Monday. It also represents a 23% drop from the high watermark Li-S Energy hit, after its IPO.

It’s possible that the extreme volatility we have seen with this company stems from what it does.

Li-S Energy share price cools after explosive IPO

Li-S Energy is in the business of batteries. Rechargeable batteries to be precise. It is working on a new battery technology called Lithium-Sulphur, which is where the ‘Li-S’ comes from. According to the company, Li-S batteries have the potential to be more energy efficient, lighter, safer, as well as less environmentally taxing than the current and dominant lithium-ion technology that most rechargeable batteries currently use.

As many investors would be aware of, battery technology and renewable energy are hot areas on the markets right now. With countries around the world embracing the ‘net-zero by 2050’ target for reducing greenhouse gas emissions, investors have been scrambling to back what could be the energy winners of the future. Judging by what happened with the Li-S Energy IPO, it seems there are more than a few investors who are bullish on this company as a part of that story.

At today’s closing Li-S Energy share price of $2.34, the company has a market capitalisation of $336.32 million.

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