After ending Wednesday's session at the lowest point of the year, shares of TMC the metals company (TMC -3.72%) are bouncing higher today. As of 11:37 a.m. EDT on Friday, the stock is up 8.1%, having eased off from its 16% rise earlier in the day.
The company, a start-up dedicated to mining the seafloor for metals used in EV batteries, hasn't reported any developments that are leading investors to click the buy button today. Instead, they're responding to the fact that insiders are buying stock themselves, an encouraging sign for the beleaguered business.
In two filings made public today, investors learned that it's not one, but two insiders who decided to scoop up shares recently. Gerard Barron, the CEO, bought 34,000 shares this week in a transaction valued at about $150,000, increasing his position to 14,243,752 shares. Andrei Karkar, the company's director, dug a little deeper into his pockets to pick up shares, buying 2,250,110 in a transaction valued at $10 million.
After the stock plummeted over the past two weeks, investors are clearly impressed with the confidence that management is showing with the recent purchases and recognize it as an auspicious sign that good things are on the horizon. But investors shouldn't expect the mining company's financials to grow more lustrous anytime soon; management doesn't expect to generate revenue until 2024.
Although the metals company offers investors a unique opportunity to gain exposure to the rapidly growing EV market, there's plenty of risk that the company faces in developing its innovate metals production project. Therefore, only investors with a high tolerance for risk should consider following the insiders at this point.