The problem with buzzword investing is that it rarely delivers on longer time horizons, barring occasional flukes. With the hype around LK-99 now perched on a downward spiral, the stocks that had recorded remarkable gains in recent weeks on the back of the manic effervescence around the room-temperature superconductor candidate are now due a brutal reality check.
As a refresher, LK-99 is a gray-black compound of lead, copper, phosphorus, and oxygen, formally known as copper-substituted lead phosphate apatite. In late July, a group of researchers hailing from Korea University claimed that the compound exhibited superconductivity at ambient temperature and pressure, owing to structural shrinkage and the corresponding creation of “superconducting quantum wells (SQWs)” as copper cations substitute lead cations within the insulating structure of lead phosphate apatite.
While social media soon became rife with multiple replication videos that showed LK-99 responding to the repellant force of a magnet, almost none were able to conclusively demonstrate the signature “magnetic flux fixation effect,” where a superconductor hovers over a magnet. Last week, a Chinese researcher did claim success in this regard but soon diluted his original assertions with a number of caveats.
I expected that interest in LK-99 would just die a slow death after no one could replicate it; rarely is a smoking gun found that explains the spurious observations.
But in this case it seems we have a full coroner's report!https://t.co/rPLbzXdrgV
— Prof. Michael S Fuhrer (@MichaelSFuhrer) August 9, 2023
This brings us to the crux of the matter. Perhaps in what signifies a death knell for the hype surrounding LK-99, a new study that was submitted on the 08th of August claims that the superconductor-like behavior of the copper substituted lead phosphate apatite is due to the first-order structural phase transition of copper (II) sulfide – a commonly occurring impurity.
We noted in a previous post that some stocks listed on the South Korean stock exchange had been clocking in phenomenal gains over the hype surrounding LK-99. Now that this speculative wave has crested and is already receding, these stocks are due a brutal correction, given their still-lofty valuations.
The manufacturer of high-temperature wiring and electromagnets, SuNam (KOSDAQ: 294630), is down nearly 19 percent today and over 31 percent in the past 5 days. However, the stock is still up an astonishing 130 percent over the past month.
Similarly, Mobiis (KOSDAQ: 250060), a company that is involved with nuclear fusion and particle-accelerator technology, is down nearly 2 percent today and about 25 percent in the past 5 days. But the stock is still up over 23 percent in the past month.
The growing pessimism around LK-99 has not even started to reflect in the stock price of Shinsung Delta Tech (KOSDAQ: 065350). Consider the fact that the stock is still up nearly 15 percent today and 5 percent over the past 5 days. The stock is up an astonishing 157 percent over the past month.
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