Why Sigma Lithium Stock Popped on Its Tesla News
Shares of Brazilian lithium production start-up Sigma Lithium (NASDAQ: SGML) surged 13.1% through 10:25 a.m. ET on Tuesday morning, the first trading day since Bloomberg reported that electric car giant Tesla (NASDAQ: TSLA) may buy the company.
"Rampant demand" for lithium to produce electric car batteries lies behind Tesla's bid, reports Bloomberg. Also helpful is the fact that Sigma Lithium's biggest shareholder, private-equity fund A10 Investimentos, is reportedly looking to exit its investment and seeking a buyer for its 46% stake in the company. And yet, a sale is not assured.
Although Tesla declined to comment on Bloomberg's story, the news agency reported that Tesla is actually considering several lithium investments in addition to (or as an alternative to) Sigma Lithium. Meanwhile, Sigma Lithium shares have already tripled in price over the past year, a fact that may incentivize Tesla to keep on looking in hopes of finding a cheaper way to get the lithium it needs.
Source Fool.com
