LINRF - Albemarle Capital Raise Deemed Necessary To Fund Future Projects Analysts Say | Benzinga
Albemarle (NYSE:ALB) plans to issue up to $2 billion worth of convertible preferred stock. That amount equaled around 13% of the company's market cap, which was cut in half a year ago owing to a substantial decline in lithium prices and a failed Liontown Resources (OTCPK: LINRF) acquisition.
Following the news, the stock declined 20%, erasing all the gains of February's bullish run. Analysts, including Seth Goldstein from Morningstar, expressed surprise at the move, citing Albemarle’s healthy balance sheet.
Goldstein highlighted Albemarle’s low net debt/adjusted EBITDA ratio of 1.1 times at the end of 2023, well below the company’s long-term target of 2.0-2.5 times.
He also pointed out that lithium futures and China spot prices have recently increased. Rising lithium purchases by battery producers is driving the trend.
Goldstein anticipates lithium sales volumes aligning with end-market demand as inventory ...