Things just got even worse for the ASX's most-shorted stock

The embattled uranium miner Lotus Resources (ASX: LOT) has had the unwanted distinction of being the ASX's most-shorted stock for much of 2026. 

After a six month period in which it announced a $76 million capital raise at a 25% discount, retracted guidance on its mining results, halted trading after delays to its Kayelekera Project meant it couldn't provide an operational update and announced it would need further funding to complete the restart of the mine, the stock has now racked up short interest of 22.8%.

As if things weren't bad enough, today the company announced a new $60 million cap raise at 22 cents a share, a staggering 66% discount to its current (albeit still halted) share price.

As Marcus Today's Henry Jennings told me simply, "it is not good".

"Lotus has been troubled for some time and needed funds," said Jennings. "This has solved that issue but it has put existing holders over a barrel. It's put up or be significantly diluted." 

The dual raise is intended to help fund operations on its Kayelekera Project and includes a binding agreement with CVI Investments Inc for $35 million in senior unsecured convertible notes, as well as a binding commitment letter with Mercuria Energy Trading for a $43 million inventory-backed prepayment facility.

While the raise is crucial to the company's ability to ramp-up Kayelekera, it's very much the corporate equivalent of a Faustian pact, says Jennings. 

"It's better than going bust, but it will come at a huge cost. Good will has left the building and CVI Investments will be taking their pound of flesh."

The raise could also provide some hints as to where the market believes its current valuation may be. Given LOT shares were already down 69% in 12 months when trading was halted on 17 June, we can expect a bloodbath whenever it finally resumes trading. 

It recalls the story of Bapcor (ASX: BAP), the automotive parts company that has plummeted more than 90% over the last few years after huge losses and operational issues prompted a deeply-discounted cap raise.

For investors, the next few months could be brutal. For stock market rubberneckers, it's the slow motion car crash you can't take your eyes off.