InvestorPlace has brought you many different ways to potentially capitalize on the revolution in vehicle electrification. Today, you can add deep-sea mining business The Metals Company (NASDAQ:TMC) stock to that list.
That said, you’ll definitely want to be aware of the risks associated with TMC stock.
For one thing, the stock is a very fast mover – and by that, I mean in both directions. TMC Stock has swung as high as $15 and as low as $5 over the course of its brief time on the market. The Metals Company is not a buy for the conservative investor.
Plus, it hasn’t been publicly traded for very long, so don’t expect to see much price history there.
On the other hand, with greater risk, there can be enhanced rewards. If you’re on board with an indirect play on electric vehicles, then TMC stock may be right up your alley.
So, let’s dive right in and see what all of the buzz is about.
In the end, you might find yourself putting the pedal to the metal and taking a long position in The Metals Company.
A Closer Look at TMC Stock
After downloading the company’s investor presentation, I learned that The Metal Company was founded in 2009, under the name DeepGreen Metals.
However, the company wasn’t publicly traded as TMC stock until its merger with a special purpose acquisition company (SPAC) called Sustainable Opportunities Acquisition.
The first day of trading was Sept. 10, and the share price hovered around $9 at that time. A few days later, the stock ascended to a high of $15.39.
Unfortunately, the chasers were soon punished as TMC stock started to decline over the ensuing days. Today, the share price has slid all the way down to around $5.10.
That’s a rough landing, to say the least. It’s typically not a positive sign when a stock falls below its debut price. Therefore, it’s not going to be easy to justify a long position now. How can we build a case that TMC stock deserves the attention of bottom fishers and value hunters?
Filling the Gap
Perhaps we can start to develop a solid bull thesis with a broad overview of the electric vehicle market. The Metals Company’s investor presentation projects that global electric vehicle sales will reach 55.5 million units by 2040.
We can expect those vehicles to require battery metals, and The Metals Company predicts that worldwide electric vehicle battery demand will soar to 3,612 million megawatt-hours by 2030.
Furthermore, the company is bracing for “Massive deficits” in key electric vehicle battery metals, starting in 2025.
How will this particular company help to fill that gap?
You probably won’t expect this answer (unless you knew it already): by retrieving deposits of battery metals from sea-floor polymetallic nodules.
I suppose you could say that it’s “mining, redefined,” since we usually think about miners collecting minerals from the earth, not the seafloor.
A Deep Source of Metals
Yet, this could prove to be a rich source of in-demand minerals. Apparently, The Minerals Company is sitting on “The world’s largest estimated source of battery metals,” with “Enough nickel, copper, manganese and cobalt in situ to electrify 280 million EVs.”
Frankly, if you want to invest in a seafloor polymetallic nodule specialist, the Nasdaq Exchange doesn’t offer very many tradable businesses besides The Metals Company.
According to the company, there are a number of advantages to this mining methodology.
For one thing, the minerals are unattached to the sea floor, meaning that there’s no need for drilling and blasting. Second, The Metals Company collects low-hazard elements like antimony and mercury, “no toxic processing tailings,” the company asserts.
Additionally, this method provides for “Microporous” metals (easier to smelt) as well as “Low head-grade variability” (easier to process).
The Bottom Line
So now, InvestorPlace has brought you yet another indirect way to (hopefully) profit from the vehicle electrification movement.
Obviously, The Metals Company isn’t your typical miner. It’s a business that’s willing to look for high-need metals where most others won’t.
And now that TMC stock is out of favor, perhaps it’s the right time go fishing. You might catch a real winner here.
On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
David Moadel has provided compelling content – and crossed the occasional line – on behalf of Crush the Street, Market Realist, TalkMarkets, Finom Group, Benzinga, and (of course) InvestorPlace.com. He also serves as the chief analyst and market researcher for Portfolio Wealth Global and hosts the popular financial YouTube channel Looking at the Markets.