The Metals Company, TMC, is an extremely early stage mining company. They are attempting to find a feasible way to mine polymetallic nodules on the ocean floor. The nodules are comprised of cobalt, copper, manganese, and…nickel! Their stock almost doubled in price from the well known nickel squeeze, even though they don’t, you know, have any active mining operations and won’t for the foreseeable future. The technology is not yet there, and it is unclear if they can profitably extract the nodules from the ocean floor.
Nickel as you probably know, squeezed so hard it broke the LME (due to their own incompetence and poor planning, to be fair. The also vaporized a bunch of executed trades - more exchange fuckery.). While the other metals that spiked during the beginning of the conflict on the LME have deflated nickel has been stuck at its squeeze halt price. That is changing now, with nickel down its 8% limit for the day already. I expect it to continue to limit down.
TMC also has earnings on the 24th. I would expect, since they aren’t mining anything, that they won’t be making any money. Since they need to actually figure out the technology to make extraction of these nodules feasible, I don’t think they’ll be announcing any ability to make money in the short to medium term either.
They are getting a nice little premarket bump for a nothing burger press release for a pre-feasibility study for a processing plant in India. The stock seems to have some meme strength to i, but we’ll see if it holds.
The stock hasn’t really moved down much from it’s nickel squeeze bump (down 4% if you count the premarket bump today). I think that with the price of nickel set to deflate (I’ve seen nickel industry people say they expect prices to settle at 25k or so - its at 42k as of this morning after hitting its 8% LME imposed price change limit), the stock will come down with it. So, I’m getting some puts.
What puts are you thinking of? Chain overall doesn’t have that great of volume or OI. The 4/14 2p or 3p look decent and are cheap.
I picked up a couple 4/14 3p, have to be patient due to the spread. Puts are heavily outnumber by calls on the OI chain, but those bets were placed with rocketing nickel prices I think. It seems to have a bit of meme strength to it, ranks high in WeBull popularity list. They just had a string of press releases, but nickel went limit down for the third straight day ( they increased the limit to 12% so it’s gone down 5, 8, 12% the last three days). That being said I probably won’t hold through earnings.
Bought some 2’s april 14th this morning. Pretty decent movenent in the right direction so far lets see how it plays out.
Moved the right way most of the day, puts didn’t move as much as I’d like, but I note that the OI on 4/14 3p tripled from yesterday to today. The volume end of day was absolutely bananas, close to 1.3 million in the last 10 minutes with insane candles. Shorts covering?
I think nickel still has a ways to go, hoping it continues in a negative direction.
What a great call out so far. How much futher you think it will drop?
Personally, I’m looking for $2 by earnings which is AF Thursday. Edit: To be fair, I have no idea though. That’s just my uneducated conjecture given the trajectory so far. If you see profit, take profit.
Nickel is starting to find equilibrium. I’m still looking for it to hit 25k, sitting at 29.4k at the moment, down 6% so far today. But, that catalyst is exhausting itself, I think.
What’s interesting is all the empty press releases this company is dumping out before earnings. I’m beginning to think they are going to be showing some ugly looking cash burn. Need to investigate further. My original plan was to dump before earnings, and I still don’t plan on holding through earnings, but I might be tempted with a few given the sentiment I’m sensing and the direction the stock is going.
FYI I had picked up some 4/1 3p and I just sold a couple to test liquidity, given how low the option volume has been. Got my ask at .80 cents on the couple I sold off (that was before today’s knife). Hoping that option volume picks up so that the exit can be smooth.
Just wanted to add: this stock has ripped up before and probably will at some point again. If you have profit you’re happy with please take it. I’m holding still because I think it can still drop but I’m ready to bail if it goes in a different direction.
Appreciate the input. In sitting on 4/14 2p atm. Was going to sell before earnings more thsn likely.
Fantastic callout. Wish I joined.
Totally missed this earlier, but just wanted to say that this was such a nice call! It played to your expectations almost to perfection.
Nickel is doing wild things on the LME right now and TMC has that energy premarket. It may have found it’s bottom yesterday.
I’m going to look to cut today, either at open if nickel prices continue to rally, or later if they look to be in a downtrend. Cut all my 4/1 3p yesterday, still holding 4/14 3p.
Sold on the opening knife for a 50% gain. All out now.
Guess we should of bought back in lol. O well green is green.
Yeah, psyched myself out when i woke up this morning and it was up 15% along with LME nickel. I’m not mad though, the play was what we thought it was and I made a decent return.
This turd might end up down 10% EOD anyways lol. I’m going to keep watching it to see if it craters after earnings too.
Post mortem:
This worked out pretty much the way I had hoped. If we had held until earnings with the puts, would have been a bagger. Bailed early for 50-60% depending on strike, but that’s ok.
If they ever do figure out how to mine the nodules economically, could be amazing, but that’s 2+ years out and they have not proven the technology/feasibility yet IMO.
Going to request an archive.