SQM - Why Sociedad Quimica y Minera de Chile Stock Crashed Today
2023-04-21 13:04:37 ET
Friday dawned bleak for investors in Sociedad Quimica y Minera de Chile (NYSE: SQM) . Shares of the Chilean lithium miner tumbled by 14.8% through 12:57 p.m. ET in the wake of the Thursday evening announcement from Chilean President Gabriel Boric that he intends to nationalize the Chilean lithium industry -- which may or may not include SQM itself.
What does it mean for a country to nationalize an industry -- and more particularly, the companies that operate within that industry? At the most basic level, nationalization involves a forced transfer of ownership, with present owners of the property in question required to sell or simply surrender that property to the government.
Nationalization may -- or may not -- include the government compensating the present owners for their property. But even if the government pays for the property it takes, because this is a forced sale, the government sets the price, which may be a fair price -- or may not.
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Why Sociedad Quimica y Minera de Chile Stock Crashed Today