SQM - Lithium Americas: After Taking Several Hits It Is Now A Value Play
2024-06-04 08:35:00 ET
Summary
- A short report put some downward pressure on Lithium Americas.
- Lithium stocks are unloved and unwanted. It has been a rough few months with the stock price getting cut in half, but buying cheap and holding can work.
- We explore the math behind the project to show exactly how the project could be funded.
- While dark clouds loom over lithium in the short term, the long-term demand for lithium is rising. New projects are announced monthly that will require massive amounts of the white metal.
- While risky, we view Lithium Americas stock as a value play given future lithium demand.
A recent short report attempted to paint a very unfavorable picture of Lithium Americas ( LAC )(LAC:CA) and that has caused the stock to drop rather sharply over the last week or so. Let's look a bit deeper into LAC to see if this has become a value play.
DOE Loans $2.26 Billion to Lithium Americas
Something to remember, the Department of Energy is not going to throw away $2.26 billion without doing a degree of due diligence. Nor is General Motors ( GM ) going to throw away its tranche #1 investment of $320 million in LAC. (Note: GM has a second tranche set to invest $330 million. If Tranche 2 funding is secured, the GM investment expands to a total of $650 million total)....
Lithium Americas: After Taking Several Hits, It Is Now A Value Play