TMC Stock: Deconstructing the 24% Surge and 'Short Squeeze' Claims – What Reddit is Saying
Okay, let's dissect this Metals Company (TMC) situation. The CFO, Craig Shesky, is out there making noise about short sellers facing "a very bad day." Bold words. But as any analyst knows, you gotta look under the hood.
First off, the stock's been on a rollercoaster. Up 385% this year, but down nearly 50% from its October peak. That kind of volatility tells me there’s a lot of speculation baked in. The October surge, according to some reports, was tied to U.S.-China trade tensions and rare earth hype. But when those tensions eased, the stock tanked. Classic "buy the rumor, sell the news" scenario. TMC Stock Attempts A Comeback After Rare Earth Hype Faded, Targeting $11
The $23.6 Billion Question
Now, TMC is touting its control over $23.6 billion worth of polymetallic rocks on the Pacific Ocean floor. That's a big number. But here's where the skepticism kicks in. That's an estimated value. It assumes they can actually extract these metals profitably and navigate the regulatory hurdles. And those are two massive ifs.
The company's market cap is around $2 billion. So, yeah, there's a potential upside if they can pull it off. But the gap between the estimated resource value and the market cap isn't just opportunity; it’s risk. A risk that the market is pricing in pretty efficiently, I'd say.
Shesky mentioned production potentially starting before Q4 2027 if regulatory approvals come through quickly. Optimistic, to say the least. Trump's executive order in April aimed to fast-track deep-sea mining, which is great for headlines. But executive orders don't magically eliminate environmental concerns or technological challenges.
And let’s be real, deep-sea mining is still largely uncharted territory. Environmental groups are already raising red flags about potential ecological damage. Stricter regulations or even outright bans are definitely on the table. This isn't like opening a new coal mine; the unknowns are significant, and the potential blowback could be severe.
The company ended Q3 with $115 million in cash, and there's potential for another $430 million from warrants. Silversteyn at Water Tower Research thinks they might not need additional funding soon. Maybe. But their net loss for the quarter was $184.5 million, compared to $20.5 million the previous year. That's a massive jump in losses. So, while the cash position is decent for now, the burn rate is a concern. It gives them a runway, sure, but how long is that runway, really?
Short Squeeze or Wishful Thinking?
Shesky is specifically targeting short sellers, saying they should be "quite nervous." He notes that roughly 25 million shares are held short. The implication is that any positive news could trigger a short squeeze and send the stock soaring. The Metals Company (TMC) Stock Jumps 24% on CFO’s “Short Squeeze” Comments
But here's the thing: short squeezes are unpredictable. They rely on herd behavior and panic, not necessarily on underlying fundamentals. And while a short squeeze could provide a temporary boost to the TMC stock price, it doesn't change the long-term challenges the company faces.
I’ve looked at hundreds of these filings, and the level of enthusiasm from the CFO contrasts sharply with the financial realities on the ground. Maybe he’s trying to instill confidence, or maybe he genuinely believes TMC is undervalued. But as an analyst, I rely on data, not rhetoric.
Plus, let's not forget the broader market context. Deutsche Bank recently raised its 2026 gold price prediction, which is indirectly helping rare earth metal companies like TMC. But these external factors are just that – external. They can provide tailwinds, but they don't address TMC's specific operational and regulatory risks.
This Isn't a Sure Thing
So, what's the verdict? TMC has potential, sure. But it's a high-risk, high-reward play. The CFO's confidence is notable, but it needs to be balanced against the company's financial losses, the environmental concerns, and the regulatory uncertainty surrounding deep-sea mining. Don't get blinded by the shiny numbers; look at the balance sheet.