Why Syrah Resources Share Price Tanked

What happened to Syrah’s share price?
Shares of Syrah Resources [ASX:SYR] lost 4.97% on Monday closing at $3.06. This is a long way south from their 2017 high of $3.58.
What’s going on with the Syrah’s share price?
Syrah Resources hit an all-time high of $6.72 in June 2016. The stock price then went into free-fall for the next six months bottoming out at $2.62 in December. Investors were worried about how much further the stock would fall. The big question was, ‘Will 2017 break the company completely?’
It didn’t. And the stock marched higher to $3.58 by mid-January. However some negative coverage from an unknown, anonymous ‘research house’ on controversial stock website Seeking Alpha saw people considering if Syrah’s gains were pumped up or not. And with some recent changes to management, the market isn’t taking the news very well.
What now for Syrah Resources?
Syrah’s in the graphite game. They’re in the process of shifting from explorer to producer. Importantly the company is gearing up to produce graphite that’s a key ingredient in lithium-ion batteries. In particular it’s the kind of graphite for Li-on that goes into electric cars.
There’s no doubt we’re entering a future of electric cars. And the need for lithium-ion batteries will rise for those cars. But it’s not just lithium that’s needed to make the batteries work. It’s graphite and nickel too. In fact at one point Telsa Motors [NASDAQ:TSLA] Elon Musk said, ‘Our [battery] cells should be called Nickel-Graphite…’
So while Syrah might be hurting for now, long term this just might prove to be a great buying opportunity.
Sam Volkering,
Money Morning