The Allkem Ltd (ASX: AKE) share price finished the week down 3.7% to $13.17 on Friday.
Leading up to Friday, shares in the lithium producer were on course for a weekly gain. However, the market went cold on the $8.46 billion lithium bellwether following news of an insider parting ways with a portion of their Allkem shares.
To what extent has this member of leadership sold down their stake? Let's take a closer look.
Weighing on the Allkem share price
It appears shareholders struggled to hold an optimistic attitude amid a recent insider transaction on Friday. According to the notice, non-executive director Richard Seville made the call to cash in on a hefty portion of his Allkem shares on 29 and 30 August.
Looking at the details, Seville sold 1.5 million shares on-market on Monday and Tuesday. The total number of shares sold was split evenly between the two days — 750,000 for an average price of $13.67 on Monday and 750,000 shares for an average price of $14.02 on Tuesday.
In total, the former founding managing director of Orocobre (which merged with Allkem) landed $20,767,500 from the sale. In turn, Seville retains 3 million shares following the transaction, valued at nearly $40 million at the current Allkem share price.
Allkem did not provide any further information on why Seville chose to offload the shares. Notably, the sale notice swiftly follows yesterday's notice about the sale made by fellow independent non-executive director, John Turner. However, Turner's sale was a much more modest A$275,165 worth.
What else?
While the Allkem share price might be influenced by a significant insider share sale, the pessimism is relatively widespread across ASX lithium shares on Friday.
For context, other major lithium names such as Pilbara Minerals Ltd (ASX: PLS), Liontown Resources Ltd (ASX: LTR), and Core Lithium Ltd (ASX: CXO) were down 1.7%, 4.5%, and 5.2% respectively. This is despite lithium carbonate prices holding steady, according to Trading Economics.
Perhaps Piedmont Lithium Inc (ASX: PLL) plans to build the largest lithium hydroxide processing plant in the United States has sent a signal to the market that increasing supply is likely to come online. This might be a reminder, that at the end of the day, lithium prices are purely driven by supply and demand.
