How have Sayona Mining shares risen 25% in just 2 days?

What on earth is going on with Sayona shares?

Sebastian Bowen

Author Bio Sebastian Bowen has been a Motley Fool contributor since late 2018. Sebastian found his passion for writing and educating others about shares and all things finance after completing his studies in political, economic and social science and enjoys bringing this passion to life at the Fool. His investment philosophy is a simple one – buying high-quality companies at prices that make sense. When he’s not researching his next investment at all hours of the morning, Sebastian enjoys classic movies and likes to unwind with a good book, newspaper or record. Areas of Expertise Dividend investing ETFs Education Bachelor of Political, Economic, and Social Sciences (Government and International Relations), University of Sydney Social Media X/Twitter Favorite Investment Quote "In the short run, the market is a voting machine, but in the long run, it is a weighing machine." – Benjamin Graham

Published February 15, 2024 3:28 pm AEDT

The S&P/ASX 200 Index (ASX: XJO) has had two highly volatile trading days. Yesterday saw the ASX 200 shed a depressing 0.74%. But today thus far, the ASX 200 has piled back on with a rise of 0.73% at the time of writing. But let's talk about the Sayona Mining Ltd (ASX: SYA) share price.

If you think the ASX 200 has been volatile, wait until you see what the Sayona share price has been up to. This ASX 200 lithium stock has gained an extraordinary 25% over just the past two trading days. Yep, Tuesday saw Sayona shares close at just 4 cents each.

But by market close yesterday, those same shares were up to 4.5 cents apiece. Today, the gains have just kept on coming, with Sayona adding an additional 13.3% to 5.1 cents.

So what on earth is going on with this embattled lithium stock this week?

An executive in a suit smooths his hair and laughs as he looks at his laptop feeling surprised and delighted. — Image source: Getty Images

How has the Sayona share price managed a 27% rise in two days?

Well, unfortunately, it's a bit of a mystery. Sayona's stunning share price rises have come out of the blue, for want of a better phrase.

We did get an ASX announcement from the company this morning. But that just announced that Lucas Dow has been appointed to Sayona's board as an independent non-executive director. Hardly the sort of stuff that sees a company add a third to its valuation over two trading days.

Before this announcement, Sayona's last ASX release was the 31 January quarterly cash flow report, which had a negative impact on the company's shares at the time.

However, it's not just Sayona that has vaulted dramatically higher in value this week. Core Lithium Ltd (ASX: CXO) shares have bounced by more than 11% since Tuesday's trading. Saying that, other lithium stocks like Pilbara Minerals Ltd (ASX: PLS) and Arcadium Lithium plc (ASX: LTM) have gone backwards.

In Sayona and Core Lithium's case, we could be seeing a bit of a short squeeze going on. As my Fool colleague James reported on Monday, both Core and Sayona remain on the list of the ASX's most short-sold shares.

Perhaps yesterday's rally has triggered a round of short sellers closing their positions, which in turn would have forced up both companies' share prices even further, and spurred more short sellers to close.

Whatever the reason, it's certainly been a good two days to own Sayona Mining shares.

Even with these gains though, the Sayona share price still remains down by more than 77% over the past 12 months.

Automatic Renewal

By taking up this offer, you will also be enrolled in our auto-renewal program, which is our way of making your ongoing subscription easier by ensuring uninterrupted service. Don't worry, though – you're not locked in, and can cancel your auto-renewal at any time before each 'anniversary' date without question or penalty.