Up 25% in 2023, here's what went right and what went wrong for the Liontown share price

Liontown shares drew the interest of several multi-billion-dollar companies in 2023.

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The Liontown Resources Ltd (ASX: LTR) share price certainly saw plenty of action in 2023.

With some huge daily moves higher, and some lower, long-term investors will have had to hold on tight through the volatility.

As for the 12-month gains, the S&P/ASX 200 Index (ASX: XJO) lithium stock ended 2022 trading for $1.32 a share. By the time the closing bell rang on 2023, shares were swapping hands for $1.65 apiece, up 25%.

That saw the Liontown share price far outpacing the 9.3% gains posted by the ASX 200 in 2023.

Here's what really grabbed ASX 200 investors' attention during the year.

ASX share price rise represented by investor riding atop leaping lion

Image source: Getty Images

Liontown share price leaps on takeover offer

Liontown certainly didn't catch any tailwinds from the global lithium market.

Over the course of 2023, lithium carbonate prices cratered by some 80% as supplies ramped up faster than demand.

What did send the Liontown share price soaring, however, was the takeover offer from United States lithium giant Albemarle Corp (NYSE: ALB) in March. An offer that Liontown's management rejected, calling the proposal "opportunistic".

Albemarle's offer valued Liontown at $2.50 per share when it had recently closed at just $1.43 per share.

The result?

On 28 March shares in the ASX 200 lithium company rocketed an eye-popping 68.5%, closing the day at $2.57 per share.

You may have noticed that's higher than the takeover offer price. That was driven, in part, by hopes of an improved offer to come, alongside a scramble for shares by Gina Rinehart's Hancock Prospecting.

Indeed, Albemarle later upped its offer to $3 per share and by 6 June, the Liontown share price had reached $3.15, putting it up 139% in just over five months.

ASX 200 lithium stock tanks as offer rescinded

By 13 October the Liontown share price had retraced to $2.79 a share, as investors began to cotton on to the fact that Hancock Prospecting could well have acquired enough shares to block Albemarle's acquisition.

And those investors who sold in the leadup to 13 October will have been happy they did so.

Liontown shares entered a trading halt on that day.

When the ASX 200 lithium stock recommenced trading on 20 October, it was to news that Albemarle was pulling its offer "due to the growing complexities associated with executing the transaction".

Those complexities, most likely, referred to the large stake acquired by Hancock Prospecting.

The Liontown share price crashed 31.9% on the day to close at $1.90.

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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