It would be a commercial disaster for LYC to acquire MP now or any time soon.
MP, like us, is in disfavor with the markets. I think we would be punished by the markets for LYC to take on the burden of a money losing business in an extremely difficult and un- vogue sector. There is simply too much bad news, which acts as a grey cloud over the entire battery industry.
Lucid is on the verge of collapse, Rivian just reported a disaster performance and 2024 guidance, MP the same, lithium prices have collapsed, gas engine sales are up, EV'S are losing their luster with investors/consumers. Prices for EV'S have caused buyer fatigue due to monthly payments, higher insurance, and limited powering stations and alternatives. Even wind turbines are struggling.
MP has a major problem at its doorstep. Its very own business plan to downstream their mining activities has collapsed by the CCP policy of not transferring RE processing techniques abroad. This reestablishes them as a minor, digging for inexpensive minerals (at this time).
The better plan by any sensible executive is to take a "wait and see" approach. MP may easily fall prey to its predecessors' demise. If so, it will be a bargain at pennies on the dollar to buy it in receivership . If MP can reserve its losses, that same executive will be happy to pay a premium for a profitable business in a sector staging a bottoming out.
The markets would simply react terribly if we spent our cash reserves (and also carrying fresh debt and a huge amortization bill) in a money loser, operating in a damaged sector.
It certainly does not look favorable for MP. And lets be very honest, they have been mocked and punished for announcing that they sold eight (8) entire pallets (10 MT) of finished oxides, when they had claimed they were going to grab the USA market with massive GM contracts, and a processing facility to fival our Lamp or Kalgoorie.
The sector is in danger. Lucid is on its last leg. Rivian reported disappointing results and stagnation for 2024. Lithium prices have collapsed. Not to mention that the UK has fallen into recession, and there is uncertainty all along the EU-Ruso frontier. The markets reward companies that buy winbers. Not losers.
Think about it. If any of us were handed a million dollars in cash, would we run out and but Rivian stock. Lucid stock, MP stock. Or, would you buy Nvidia?
I think LYC smelled blood in the water after the RE technology transfer ban was put in effect. I also think the US Government was the "matchmaker" for the discussion. MP has no momentum to build a facility without cutting-edge technology that it can not access.
As things stand today, MP is about as welcome as a "skunk at a wedding." Let it rot. It's more valuable to us as a failing entity than under our umbrella. BTW, who do you think will get more DOD and DOE grants from if MP becomes an unviable company. WE DO...
Lastly, as they are Chinese owned and dependent on downstream Chinese processing, who is going to fund them? Since we align fully with Australia, Japan, and the US, those nations will continue to support us no how much worse the industry is stalled.
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Well beyong me @jayszip, I’m really just following ‘need’. However, if what you mentioned is correct, it would be nice to see China interest rely on Lynas for a change, if Lyc get into the driving seat of MP, if not for pittens, but next to Pittens.
(20min delay)