Prior to last week, Lithium Americas (TSX:LAC)(NYSE:LAC) stock probably wasn’t on your radar. On Sept. 23, the stock was down 2% on a year-to-date basis, and was looking like a dud. But then, the next day, news came out that the Trump administration was looking to potentially invest in the business. The stock doubled in value and trading volumes also skyrocketed.
The Trump administration is seeking a stake of around 10% in the company. This is as it’s in the midst of renegotiating a loan with the Department of Energy. Of key interest to the U.S. government is that Lithium Americas shares a stake in the Thacker Pass lithium project with General Motors (NYSE:GM). For the White House, the project is appealing as it can be crucial in increasing lithium production in North America, which is crucial for multiple industries.
Thus far, the news has been exceedingly positive for Lithium Americas stock, which has hit a new 52-week high and is at levels it hasn’t been at since 2023. Having the U.S. government as an investor could help ensure the project progresses, which should lead to strong growth for the business in the future. But the stock could also be vulnerable to greater scrutiny and pressure from the U.S. president.
Lithium Americas is still a highly risky stock to own, however, as it has generated no revenue over the past 12 months and it has incurred losses over more than $50 million USD. It’s a speculative play and investors should think carefully before taking a chance on it.
Related Stories
