PLS announced a "Disclosure of equity derivative positions".

From the announcement:

Pilbara Minerals is releasing this letter to ensure full transparency, however has no reason to believe that the information, of itself, is materially price sensitive and is not aware of any additional information of relevance.

The announcement details a number of call and put options entered into by Ganfeng Lithium, a Chinese lithium producer.

I assume this doesn't really mean much, otherwise it would be marked price sensitive, but I'm still curious to understand more about why it's been released at all.

I understand the overall structure - Ganfeng have limited their downside and upside within a certain price range - and while the overall position is large, at 105 million shares, it's still under 5%.

Further from the announcement:

Guidance Note 20: Equity Derivatives (GN20) issued by the Australian Takeovers Panel... provides that the non-disclosure of equity derivative positions, including short equity derivative positions that offset long positions, may give rise to unacceptable circumstances.

I'm guessing "unacceptable circumstances" actually means something to those in the know? One thought I had was that this could flag some price volatility around the strike price of the options? If any members have experience or thoughts I'd be interested to hear your take.

AFR reports that Pilbara Minerals CFO Luke Bortoli has resigned from the board of EML following an investigation over his use of company credit card for personal expenses. 

The chairman of EML Payments, the prepaid cards business once worth $2 billion, has quit amid a boardroom stoush over whether company money was spent on personal expenses.

Last week, The Australian Financial Review revealed Luke Bortoli, a former executive at buy now, pay later group Afterpay, repaid more than $100,000 spent on a company credit card, telling EML Payments it had been approved by other directors. Dr Bortoli is also the chief financial officer at lithium hopeful Pilbara Minerals.

To be clear, he maintains the expenses were approved. An independent review has been concluded and no action has been taken against him. He’s also repaid the expenses.

This could just be an EML boardroom power grab (as if they didn’t have more pressing matters), but it sure don’t look good.

It’s not clear what the expenses were. You could rack that up pretty quickly on a few international business flights these days, but that doesn’t seem like something that would demand an independent review.

No action to take here but noting it. Would be concerned if a pattern emerged.

[PLS HELD]

The AFR posted an article online yesterday titled "The carnage in the EV industry is only getting started".

It's syndicated from The Telegraph in the UK, and opens with some pretty bearish statements on the future of the EV industry:

Profits at the German auto giant Mercedes plunged last Friday as sales of its slick new range of electric vehicles went into freefall.

Porsche abandoned its sales targets for battery-powered cars amid waning demand from customers. Ford is losing nearly $US50,000 ($A76,000) on every EV it sells, while Tesla’s profits dropped 45 per cent. Meanwhile, battery manufacturers such as Germany’s Varta are getting wiped out.

It has become clear that the EV industry is on the brink of collapse. Hundreds of billions of euros, dollars and pounds have been pumped into this industry by political leaders and the subsidy junkies that surround them – and it is surely time they were held to account for the vast quantities of taxpayer cash that has been wasted.

Mostly the article seems to be complaining about "the billions" wasted on EVs, which I assume is a reference to public policy. It's light on details (lucky the AFR has posted it as an opinion piece!).

"Profits at the German auto giant Mercedes plunged on Friday as sales of its slick new range of electric vehicles (EVs) went into freefall." Looking at the latest results from Mercedes, EV sales are down, but only 6% YoY. Free cash flow is down, but "free fall" doesn't line up with the battery-electric vehicle results.

A graph is included titled "Tesla sales go into reverse"

Which is true - they are down for 2024! Or was 2023 an anomaly?

I don't follow vehicle manufacturers closely, and I think it's fair to say there are headwinds for vehicle manufacturers in general. But this article doesn't really bring any convincing arguments to support the theory that EVs are a failed experiment (though individual manufacturers might struggle)

My thesis around PLS is:

• many products are just far better when they are electrified, including vehicles
• battery-electric is a proven technology and will continue to be popular
• lithium will remain a critical part of battery manufacturing, and eventually we will move into the recovery phase of the cycle

I'm writing this as a reminder to myself: ignore the noise!