Most investors probably wouldn't relish the idea of buying an ASX share that has already fallen by 77%. The ASX is full of investors who love to 'buy the dip', of course. But there aren't too many investors who would regard a 77% share price drop as just a dip. Particularly from an ASX lithium stock.
After all, a 77% share price plunge arguably indicates that either the market views the stock as exceptionally overvalued or else in terminal decline.
That's exactly the scenario that investors in ASX lithium stock Galan Lithium Ltd (ASX: GLN) are confronting today. Right now, the Galan Lithium share price is down a nasty 5% at 15.2 cents a share. At the start of 2024, those same shares were going for as much as 73 cents each, meaning that Galan Lithium is today down a painful 79.2% year to date.
Investors have also endured an 81.2% drop over the past 12 months and an even more dire 92.9% fall from 2022's all-time highs of over $2.15 a share.
Check that all out below for yourself:
So it goes without saying that investors in this ASX lithium stock would probably be a fairly dejected bunch today. However, those investors might be feeling a whole lot better today than they were this time last week.
That's because we just learned that one of Galan's insiders has made a large purchase of this company's shares.
Image source: Getty Images
ASX lithium stock insider buys up big
According to an ASX filing that was released last Friday morning, that insider was Galan non-executive director Terry Gardiner.
The filing shows that Gardiner purchased an additional 200,000 fully paid ordinary shares of Galan Lithium on 18 July last week, in addition to 100,000 listed options.
These purchases were made via on-market trades. Gardiner paid $30,668 for these 200,000 shares, and a further $6,083 for the options. That implies purchase prices of 15.33 cents each for the shares and 6.08 cents for the options.
These buys take Gardiner's stake in Galan to a total of 5,388,817 ordinary shares and 1,315,217 listed options. He also owns another 3 million performance rights for this ASX lithium stock.
Those ordinary shares in Galan would have a net value of approximately $819,100 at current pricing.
So no doubt Galan Lithium investors will appreciate this show of support from this ASX lithium stock's director last week. But we'll have to wait and see whether this turns out to be a savvy 'buy the dip' move for Gardiner.
