Lithium Americas (LAC) is Down Big: Is This a Warning or an Opportunity?[Stocks](https://moneymorning.com/category/article/stocks/) # Lithium Americas (LAC) is Down Big: Is This a Warning or an Opportunity?  by Joshua Enomoto  October 15, 2025  Share it: As with most catalysts these days, **Lithium Americas** ( [LAC](https://moneymorning.com/stocks/lac)) has President Donald Trump to thank for its blistering performance in the market. Yes, [LAC](https://moneymorning.com/stocks/lac) stock is up over 213% on a year-to-date basis but the real story has got to be the trailing-month rally of approximately 192%. That’s a stunning paradigm shift if there ever was one — and it could still relatively be in the early innings. As _The Verge_ and other publications reported, the Trump administration is taking a 5 [% equity ownership](https://www.theverge.com/news/790057/lithium-mine-us-trump-us-government-stake-thacker-pass?utm_source=chatgpt.com) in Lithium Americas. Of course, the underlying commodity is a crucial component in batteries, especially for applications involving clean energy such as electric vehicles and solar systems. With the investment in [LAC](https://moneymorning.com/stocks/lac) stock, the White House has taken a more assertive role in managing domestic supply chains for critical materials. Naturally, [LAC](https://moneymorning.com/stocks/lac) stock soared on the disclosure, along with other high-level fundamentals. However, because of the extreme rally, speculators on the other side of the table have entered the fray. According to Fintel, the [short interest](https://fintel.io/ss/us/lac) of [LAC](https://moneymorning.com/stocks/lac) stands at 13.38% of the float. Generally, a short interest of 10% or higher represents a warning sign that the targeted security could tumble due to the bearish pressure. Now, it should be noted that short interest could very well comprise non-bearish activities, such as hedging or market making. However, it's the broader trend that’s intriguing. For example, in late April of last year, the short interest was 7.5% of the float.  Moreover, between October 2023 to the current month, the correlation coefficient between the [LAC](https://moneymorning.com/stocks/lac) stock price and its short interest landed at -56.4%. Basically, as short interest rose, the price declined. However, in recent sessions, the relationship has incurred somewhat of a polarity flip: [LAC](https://moneymorning.com/stocks/lac) has mooned while short interest has also ticked northward, albeit at a much shallower angle. Still, with today’s big drop in [LAC](https://moneymorning.com/stocks/lac) stock, more speculators could be enticed with the bearish argument. That could be a trap because the elevated short interest would give the bulls another reason to jump back in: the potential for a short squeeze. As such, the volatility in [LAC](https://moneymorning.com/stocks/lac) stock might not be a harbinger of doom; instead, it could very well provide the green light for the bulls. **Beat the market, without relying on brokers or biased institutions.** Email(Required) Name This field is for validation purposes and should be left unchanged. Subscribe By submitting your email address, you will receive a free subscription to _Money Morning!_ and occasional special offers from us and our affiliates. 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