Why is the Lake Resources (LKE) share price under pressure?

Despite the slide in the last few days, the lithium explorer's shares have doubled in value over the last 12 months.

Lake Resources (ASX: LKE) is among the worst-performing shares on the ASX, continuing its slide over the last few days that has seen the lithium explorer lose nearly 40% of its value in the last 2 sessions.

At the time of writing, the stock was down another 11.6% to 86 cents.

Why has the LKE stock price tanked?

The recent drop in Lake Resources shares comes after the company on Monday made the shock announcement about the exit of its pivotal managing director Steve Promnitz.

In a statement to the ASX, the company said Mr Promnitz, who had led the company since 2016, left with immediate effect but did not include any statement from him over his departure.

Lake Resources said Stu Crow will serve as executive chairman for an interim period of 6 months and oversee the transition to serve the company's critical North American and Asian supply chains. He will be responsible for hiring a new CEO and board members, as well as setting up the company's offices in the US.

"We are now establishing a North American presence to serve our offtake customers, continue to work with our US-based technology partner and engage capital markets," the company said in the statement.

"As part of this transition ... managing director Steve Promnitz will depart after establishing Lake's dominant position in Argentina."

Part of the nervousness over the company's stock price is on account of the fact that Mr Promnitz held more than 10.2 million shares in Lake. His sudden departure followed by a large block trade in the stock on Tuesday spooked investors.

Transformation

But much of it comes due to the belief that Lake Resources's transformation was led by Mr Promnitz. He has been CEO and managing director for nearly 6 years and will be hard to replace.

His exit comes less than 2 months after the junior lithium explorer signed a major new offtake agreement with global car giant Ford Motor Company (NYSE: F) in April.

Under the non-binding memorandum of understanding (MOU) signed between the 2 firms, Ford will buy about 25,000 tonnes a year of lithium from Lake's flagship Kachi Project in Argentina, which sits in the middle of South America's so-called "lithium triangle" hub.

Lake had also signed a similar agreement with Japan's Hanwa Co Ltd in March to supply up to 25,000 tonnes per annum of lithium carbonate from the Kachi Project.

The 2 deals underlined the company's growing status as a supplier to the global electric vehicles (EV) supply chain, which in turn helped reduce the risk of its Kachi project and 3 other under-development projects in Argentina for financiers and investors.

The decision also comes at a bad time for the battery minerals sector as a whole, which has been at the receiving end of negative sentiment amid rapidly rising interest rates and slowing economic growth that could crimp growth prospects for the EV industry.

Indeed, shares in rival ASX-listed explorers Core Lithium (ASX: CXO) and Pilbara Minerals (ASX: PLS) have also suffered in recent weeks and were down 8% and 2% respectively on Wednesday.

Considering buying LKE shares?

If you are keen to buy Lake Resources shares, you should consider investing through an online share trading platform.

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