The SPAC (special purpose acquisition company) world hasn’t been friendly to investors of late. Sentiment has waned significantly, making investors in companies like The Metals Company (NASDAQ:TMC) and TMC stock much more nervous these days.
Well, investors have sought to remove their investment in such speculative venture capital (VC) vehicles this year. The Metals Company is one such de-SPAC company that has seen significant capital pulled from its merger deal in the past. Early stage investors in TMC stock pulled a significant chunk of capital earlier this month around the time of the merger completion date. This provided for a rather volatile early period for investors in TMC stock.
That said, today’s move lower of nearly 25% in TMC stock is substantial. Let’s dive into what catalysts are driving today’s decline in this deep-sea mining outfit today.
TMC Stock Lower Following Key Announcement Yesterday
Yesterday, The Metals Company announced it had received its “Hidden Gem” ship — a 228-meters-long ship — which the company claims will be “the first to be classified as a sub-sea mining vessel under the American Bureau of Shipping.” Sounds cool.
Indeed, as a company focused on deep-sea mining, The Metals Company has received both accolades and criticism for its niche. On the one hand, above-sea-level mining involves serious environmental concerns. Getting new mines approved has become increasingly difficult. And the ocean floor is full of untapped (literally) potential in this regard.
By shifting the environmental concerns to the ocean floor, early investors seemed to believe the “out of sight, out of mind” approach would be favored by environmentalists. However, there are growing concerns that the damage done to the ocean could be just as bad, or potentially worse, as what’s happening above sea level.
This is a company that short sellers appear to be picking on lately. While some on social media platforms are calling for a squeeze, it’s been difficult for retail investors to come to a consensus on this stock. Accordingly, this is a company that’s been beaten down hard as of late.
Can TMC stock recover? Will this stock squeeze? The answers to these questions remain to be seen. For now, this is a stock with a tremendous amount of downside momentum that looks too risky to touch.
On the date of publication, Chris MacDonald 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.