UUUU - Why Energy Fuels Stock Plunged 12%
Shares of uranium mining specialist Energy Fuels (NYSEMKT: UUUU) are down 12% as of 2:15 p.m. EDT Wednesday, and it's not hard to figure out why the stock is struggling.
According to the experts at MiningReview.com, uranium prices need to rise to about $60 a pound in order to become profitable enough to "incentivize" uranium miners to increase production. Anything less, and it's better to just minimize the losses.
Now, thanks to significant buying by the Sprott Physical Uranium Trust (OTC: SRUU.F) , uranium prices nearly doubled between mid-August and mid-September, and seemed to be heading in the general direction of $60. They didn't quite get there, however, before Sprott itself stepped forward on Sept. 24 and killed the rally, telling The Financial Times that it had no intention of trying to "corner the market" on uranium. (If it did intend to corner the market, the thinking went, then rising demand plus limited supply might cause uranium prices to spike well above $60.)
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Why Energy Fuels Stock Plunged 12%