Just an update on the US/Oz currency spread which I am watching...

Just an update on the US/Oz currency spread which I am watching with great interest. The US flavor of Lynas (DY) closed the day at $4.88 USD while the most recent price in Oz showed LYC @ $5.74AUD…. If one takes the exchange with is around .796 and multiplies it by the share price in Oz ($5.74AUD), we have an equivalent price of $4.57USD in the US…

Instead, Lynas on the US market US closed today @$4.88USD.  By subtracting the equivalent price of $4.57USD we have a spread of almost $.31USD over what it is trading for in Australia.  Normally the arbitrage will take care of market inequities by quickly buying Lynas on the Oz market and simultaneously selling Lynas on the US market.  This is what “clamps” the US price to the price in Oz.  I am figuring that lack of liquidity in the US markets is at least partly responsible for keeping the currency ghouls at bay…

In any event, what does all of this mean.  My interpretation is that the very strong bias to the upside of Lynas in the US will translate to a significantly higher share price when the NASDAQ listing occurs.  It is reasonable to think that the Lynas share price may soar as it becomes a momentum stock.  As an example of a momentum stock, Moly in its current incarnation is being valued by the market at a crazy share price but it doesn’t matter because rare earths are quickly becoming a household word.  People will buy everything related to rare earths because of the mystic surrounding this new phenomena...

I guess my point is that we all should be aware that Lynas is the perfect example of a stock that could literally explode to the upside if rare earths continue to conjure up the next-big-thing mystic in the minds of investors. The share price of Moly and many other companies in the REMX are showing a rotation into the green energy sector and Lynas is doing well within the industry.  That said, Lynas has the potential to become another momentum stock with some pretty decent gains…

I’m not one to make predictions but I sure would hate to be sitting on the sidelines when the NASDAQ listing announcement is made…. JMHO…