Lithium Americas Slides 22% on Profit-Taking After US Stake Report
Shares cool off after a massive rally sparked by news of potential government investment in its Thacker Pass project.
Lithium Americas (NYSE: LAC) shares experienced a significant pullback on Friday, dropping over 22% as investors took profits following a meteoric rise earlier in the week. The stock's wild ride saw its value more than double, fueled by reports that the U.S. government is considering a major investment to bolster the domestic supply of critical battery metals.
The initial surge was triggered by a report suggesting the in the company. This potential investment is tied to the renegotiation of a $2.26 billion loan from the Department of Energy (DOE) for Lithium Americas' Thacker Pass mine in Nevada, a project central to the nation's strategy for building a secure electric vehicle supply chain.
The Thacker Pass project is one of the largest known lithium resources in North America. Its development is seen as a critical step in reducing U.S. reliance on foreign sources for lithium, a key component in EV batteries and energy storage systems. The project's strategic importance is further highlighted by the involvement of General Motors, which has already invested in the mine and holds offtake rights for a portion of its future production.
Trading volume for LAC stock soared to nearly seven times its daily average during the week, reflecting the intense investor interest and speculation surrounding the potential government deal. The subsequent sell-off indicates that some traders are cashing in on the rapid gains, a common occurrence after such a dramatic and news-driven rally.
While the company's stock has been volatile, Lithium Americas has with the DOE, but stated that no definitive agreement has been reached. Investors and industry observers are now closely watching for an official announcement, as a finalized deal would represent a major de-risking event for the Thacker Pass project and a powerful endorsement from the U.S. government. Until then, heightened volatility is expected to continue.