Lithium Exploration Group, Inc. (OTCMKTS:LEXG)’s Upward Rush
The lithium sector exploded recently and one of the stocks that benefited from this was that of Lithium Exploration Group, Inc. (OTCMKTS:LEXG). The ticker literally went through the roof and managed to register some big volumes alongside the price gain.
This happened after it was announced that Tesla Motors, Inc. (NASDAQ:TSLA) will be building a battery manufacturing facility in North America worth $4-$5 billion. This led to a burst in demand for shares of companies in the lithium sector like Amerilithium, Cor. (OTCMKTS:AMEL), Lithium Corporation. (OTCMKTS:LTUM) and of course LEXG.
The news pushed the stock to a 207% gain in yesterdays trading and LEXG closed the session with a price of $0.194 on a massive volume. The 29.3 million shares that switched hands during the day managed to generate a hefty $3.5 million in trade value.
It appears that the stocks in the sector will see some heavy trading in the near days as there are news coming that Apple Inc. (NASDAQ:AAPL) is having talks with TSLA. Nobody is saying what exactly they are discussing, but some of the speculations include a merger of the two companies, as AAPL‘s CEO, Tim Cook stated last year that the company plans integration of iOS in cars in 2014.
LEXG also announced that they have retired a convertible debenture that amounts to $1.6 million on February 28. Still, the latest financial report, covering the period ended December 31, 2013 didn’t show that the company was moving in a good direction.
- cash: $244 thousand
- current assets: $298 thousand
- total assets: $347 thousand
- current liabilities: $1.4 million
- revenues: $0
- net loss: $1.3 million
Furthermore, the current market cap of LEXG, which is set at $19 million seems a bit high for a company that hasn’t generated any revenue since its inception in May, 2016 and we see a possibility for a serious correction after the hype dissipates.
That is just one more reason for you to do your due diligence and weigh out the risks if you are thinking of a long term investment, instead of jumping on news.
