March was a month to forget for the Lake Resources (ASX: LKE) share price.
Shares in the S&P/ASX 200 Index (ASX: XJO) lithium company were trading for 63 cents apiece at the closing bell on 28 February. By the time the bell sounded on 31 March, shares were trading for 45 cents each.
That represents a painful 28.6% slide for the Lake Resources share price in March.
Here's what happened.
Image source: Getty Images
Short sellers and a sliding lithium price
It wasn't just the Lake Resources share price that sold off sharply in March.
A quick look at my screens confirms the vast majority of ASX lithium shares finished well in the red. Though most didn't fall quite as steeply as Lake Resources.
The one notable exception here is Liontown Resources Ltd (ASX: LTR), which finished March up a stellar 89.7%. That came in the wake of a takeover proposal from United States-based lithium giant Albemarle Corporation (NYSE: ALB).
Without a takeover offer of its own, the Lake Resources share price succumbed to pressure on several fronts.
First, lithium prices continued to slide in March, ending the month down more than 50% from the all-time highs recorded in November.
The lithium price has retraced as near-term supplies have caught up with near-term demand. An end to China's subsidies for battery manufacturers and new EV purchases has also dented investor appetite for lithium stocks.
Lake Resources faced some additional headwinds in March over reports from short-sellers. Those cast doubts on the company's funding and its Direct Lithium Extraction (DLE) technology, meant to produce high-purity lithium with far less waste.
The company had 6.9% of its shares held short in the first full week of trading in March.
The month didn't end well for the miner either.
The Lake Resources share price tumbled 13.5% on 27 March. This followed reports that non-executive chairman, Stu Crow, had sold just over 7.9 million shares in the company, for a total consideration of just under $3.9 million.
Despite management's assurance that Crow remains one of Lake Resources' largest private shareholders with no intention to sell any more stock, investors were quick to hit the sell button on the news.
Lake Resources share price snapshot
As you can see in the chart below, it's been a rough year for Lake Resources, with shares down 78.6% over 12 months.
