Land rush
The global grab for green metals
Good morning, mineral mavericks. This is your Stock Market Rundown for October 8th, 2024. Thanks for joining me. Let’s dig in:
TODAY’S TOP STORY: DIGGING FOR THE ELECTRIFIED FUTURE
Smart shoppers always patiently wait for a bargain, and stock up when stuff goes on sale. That goes for whether you’re buying cans of tuna at the grocery store, or a billion-dollar corporate acquisition.
And mining multinational Rio Tinto is pretty darn smart. The $170-billion behemoth is currently in talks to acquire Arcadium, which runs lithium mines in Argentina, Australia and Canada.
The price tag will be around $6 billion, but that’s actually a steal, because Arcadium’s stock price has slumped recently—along with the lithium price.
Why are lithium assets sitting on the sale racks? A short-term supply glut has pushed down the metal’s price, which has Wall Street analysts making bearish noises.
But longer term, demand for lithium will most likely soar, thanks to the transition from combustion engines to cleaner and greener forms of transportation. Silvery-white and ultra-light, lithium is a must-have component for the lithium-ion batteries that power electric vehicles.
Looming shortages of lithium over the next decade are worrying for automakers like Tesla, BMW, and General Motors. They’ve pinky-sworn to transition their carmaking to hybrid and electric vehicles, and they can’t do that without lithium— lots of it.
Result: a global land rush. More than 50 companies have applied to develop lithium projects in resource-rich Chile, and shovels are hitting the ground on new lithium mines in the US, too. No wonder Rio Tinto is ready to spend billions to buy in bulk.
SO WHAT ELSE IS GOING ON?
While Open AI is the hottest name in artificial intelligence, there are some red flags—such as its top execs bailing on the company like sports fans racing to the parking lot when their team is down ten-nothing. But Open AI isn’t slowing down: it just closed a $6.6 billion funding round. Who needs executives when a chatbot can run your company?
Chinese e-commerce retailer Shein is quietly pitching investors on an IPO in London. Let’s see whether portfolio managers who wear Savile Row suits appreciate the allure of $5 polyester dresses.
Amazon will hire 250,000 workers to handle America’s Christmas presents in warehouses and on trucks this holiday season. Requirements: must be able to lift 50 pounds, and be willing to play Jenga with cardboard boxes for eight hours straight without a break.
Can’t get enough of five-leg parlays on your Bet365 account? Degenerate gamblers just got a new sport to bet on: the US presidential election. A court ruled that Americans can legally bet on election outcomes. Remember, in life, it’s not whether you win or lose… it’s whether you beat the spread.
That’s it for today, diligent analysts. Let’s circle back later this week for further hijinx. Yours in capitalism, The Axe
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