What happened
After spiking higher in the middle of the month, shares of TMC the metals company (TMC 1.22%) have been on a steep slide. The seafloor mining company, which is acutely focused on nickel production, saw its stock sink more than 40% from March 14 through the market's close yesterday. And today isn't showing much of a change. The company reported fourth-quarter 2021 earnings yesterday, and, suffice it to say, investors aren't impressed.
As of 12:24 p.m. ET, shares of The Metals Company have fallen 14.2%.
So what
Unlike most companies that see a decline in their stock price the day after they report quarterly earnings, it's not a failure to meet analyst's top- or bottom-line expectations that's driving TMC stock lower today. TMC is in the pre-revenue phase of its development, so there was no revenue to speak of. The company did report a loss of $0.09 per share -- consistent with analysts' estimates -- but it's unlikely that this is what's motivating shareholders to leave their positions today.
Image source: Getty Images.
Instead, it's likely that investors were looking for the company to report more significant developments. TMC repeated its earlier-released news that it's working with Epsilon Carbon on a pre-feasibility study for a commercial plant in India. Similarly, it highlighted a collaboration with Allseas Group on developing a commercial nodule collection system. But these are news items already familiar to investors.
The company also reiterated that it expects to test its nodule collection system in the second half of 2022. With nickel prices recently touching all-time highs, investors are likely impatient and were hoping to hear that management planned on testing to occur sooner.
Now what
Today's sell-off seems to be nothing more than the restlessness of growth investors, who were hoping to hear that the company was expediting its plans. For this innovative start-up, though, investors must exercise patience as the company navigates uncharted waters.
