Arcadium is arguably more of a speciality chemicals company than a miner. In the chemicals realm, it is possible that the stock price could sink lower as the PE for speciality chemicals is on average much lower than mining: 19 as opposed to 28. (https://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/pedata.html)
BUT Arcadium is also certainly a big and growing miner, and the key is that it mines the ingredients and then transforms them itself. This is the direction it is increasingly heading.
Also, if one looks at the same table it can be seen that the percentage of money losing firms in the Speciality Chemicals industry is nearly half that of those in Metals and Mining.
I think a big reason the SP suffers so much is that the business Arcadium is creating is so unique, new and therefore unknown, that people don't know how to classify and think about it, including myself. I'm constantly getting confused. And it is confusing. This whole battery thing on this scale is like a toddler in its infancy. Iron ore miners don't make steel, copper miners don't create wiring for cars (in the main as far as I know!). Pilbara minerals (who I think Arcadium is still often compared to) as yet (to my understanding) just digs up spodumene, gets it to a certain grade and ships it. Arcadium does this too, but unlike Pilbara it is an increasingly small part of it's operations. I am a fan of the merger for the reasons that people often overlook it seems: Galaxy was a Pilbara, with its toes in the water of chemicals. Allkem was starting to wade in, but it's merger with Livent has transformed it into something quite different from Pilbara.
The way I look at it is that Arcadium has the increased income security of speciality chemicals with the potential of a rip roaring PE of speculative miners.
Those shorting want us all to think of it as a flailing miner looking into the abyss of bottomless losses while somehow simultaneously having a more conservative PE of speciality chemicals. In short they want you afraid, especially if they see the potential I do, and the opportunity to take advantage of the unknown but possibly unique advantages and aspects that Arcadium has to offer. They want potential investors to think ((and/or do themselves, I shouldn't overestimate the "sophisticated" ) Core (mothballing), Liontown (https://www.youtube.com/shorts/CtJDpCU9QLQ), Pilbara...and the even some (all?) of these are doing better because they are simply miners, with people speculating big on (not the prices that will see us through with ease) another boom in lithium prices (whatever that means...don't get me down that rabbit hole).
When I first invested in Galaxy in 2016, I imagined the potential soaring demand for lithium. When I largely took the money out as it went up, I saw the increasing bags of profits that told me not to let greed get in the way of realising the boon that I had only imagined years earlier. This time I don't have the same feeling (how I largely trade, about as far from TA as you can get, though of course it is useful and necessary for a bit of this) as I did in 2016 (that prices have the potential to explode) but I am also invested in a very different company in Arcadium. And I bought in partly for the security that Arcadium has as a speciality chemicals producer, that Galaxy didn't, and that some of these junior miners don't.
In many ways Arcadium is the best of both worlds, security and speculation. I understand the possible reasons for the current PE (especially with the exploitation and just general unknowness of this new technology and how everything works together), although I think it should be higher, but I feel the potential for the market to change on a dime and give Arcadium the speculative PE cred it deserves with only a relatively modest increase in lithium prices. Look at how it keeps doing pretty large pops at the vaguest hint of something in the market changing for the upside.
Also, if I can get in at these prices because the market says the PE has to be more speciality chemical, then really I should be thankful and just buy more.
) Core (mothballing), Liontown (https://www.youtube.com/shorts/CtJDpCU9QLQ), Pilbara...and the even some (all?) of these are doing better because they are simply miners, with people speculating big on (not the prices that will see us through with ease) another boom in lithium prices (whatever that means...don't get me down that rabbit hole).
(20min delay)