Re: Tesla Buying Li Miner? Another Opinion Piece
posted on
May 12, 2020 01:24PM
John, I will first address your comment about out of state moves by California's wealthier citizens to Nevada. Not a new process. Lots of folks, rich and not so rich, moving outbound from California. Nevada is one of the destinations.
Regarding speculation on Elon Musk possibly purchasing LAC: There are ties to Tesla and, therefore, to Musk. We have ex Tesla employees working over at LAC. My concern would be, judging by previous moves from Musk toward other lithium juniors, is that Elon Musk would be seeking a bottom dollar price situation. On the other hand I don't presently see LAC administration as being tempted by a bottom fishing move on Musk's behalf. The partnership with Ganfeng had changed all of that. Musk would have to pony up a price inconsistent with any hoped for on his part bottom fishing.
That being said then what is a "fair" Share Price? It is just a personal opinion and I don't have anything to back it up but I wouldn't suspect LAC would consider anything less than $10 a Share. Even $10 a Share would not sit well with many long time LAC stock owners... not after holding the promise of first Western Lithium and later LAC for years. Considering the 5:1 Reverse Split years ago that equates to a $2 a Share price for those who purchsed prior to the Reverse Split. ROI would be minimal for many with that situation. LAC investors who are newer to the drama of LAC and purchased after the RS might, on the other hand, consider $10 a Share as an attractive ROI... so it depends on how long you have held on to LAC/WL and what your entry price was in the first place.
I would be quite surprised if Elon Musk offered as much as $15 a Share. I don't see how he could do that considering that he is at least giving lip service to moving from California... in itself a very expensive operation and if he piled on a purchase of LAC on top of it I think that would be more than even Musk could bite off and chew.
These are just my idle thoughts on it, John. For myself I would not welcome a $10 a Share price. Something like $15 a Share would be more palatable, but very unlikely. In summary I don't believe we will see a LAC purchase by TESLA/Musk. What we might see, and what I believe is more likely, is a large block of LAC Shares purchased by TESLA as a corporation and/or by Musk as an individual. I wouldn't at all be surprised to see that scenario play out over the next 12 months.
In the final analysis these are just my opinions and don't have any other than my own speculation, which may turn out to be completely wrong. okiedo