AGY isn't worth much (permits, ponds, some scrap material, some...

AGY isn't worth much (permits, ponds, some scrap material, some old dumbbells and leftover croissants), but the market cap now is very low so a takeover is becoming increasingly likely. RIO is probably the most likely buyer since they're in the area, but they already have what they need so they're not a particularly motivated buyer. AGY's own failure won't inspire others to come in and try to pick up with the same brine and local conditions with a new team and operation.

AGY is clearly in a dire situation, raising capital is clearly something they're struggling with since they've left it later than ideal and things are only becoming worse as lithium prices continue to fall (and while they'll presumably recover in the future, it's unlikely to happen before more funds are required to keep the lights on). There's no urgency to buy so RIO will happily be watching AGY slowly die/devalue before making a move.

AGY will probably either struggle to raise the required funds and fall into a dire situation, or raise funds at a discount, kick the can down the road, increase the market cap slightly (making it less appealing as a takeover) and continue withering away, but either way, RIO is going to wait for a very low market cap before buying if they do at all, and in the scenario of a successful capital raising which increases the market cap, the share price can more easily fall lower.

I can't see any plausible scenario where being a shareholder at this time makes sense. Even if you have high optimism about a long term lithium recovery and AGY's eventual success in achieving profitable production, why hold on during the expensive long term pain between now and things turning around? Even in best case scenario involving a bright future I can't see it happening before AGY goes well below 1c, so why not sell out now and double your holding for free later, as well as avoiding the risk (probable scenario) of that never happening anyway?

It's quite amazing to see people maintaining their faith even in the face of almost certain downside, or their loyalty despite management's blatant disrespect etc. Between a company being a highly speculative high risk high reward situation and a clear train wreck, there's often a gradual process (though events like the abandonment of the plant without even admitting it despite being so obvious they renamed it should have been a clear, unambiguous message to anyone), and it's interesting to see where each individual wakes up, or which ones never do even after the company going into involuntary administration.