TMC The Metals Company (TMC 23.71%) stock is roaring higher Wednesday. The company's share price was up 23.7% as of 3:30 p.m. ET. Meanwhile, the S&P 500 (^GSPC -0.03%) was roughly flat on the day's trading.
TMC's valuation is soaring after the mining specialist published an update that is easing investor concerns about stock dilution. The news has helped continue a big rally for the stock that was kicked off earlier this week by the announcement that TMC had signed a big investment deal with a South Korean company.
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TMC stock soars on amendment to stock warrant terms
After the market closed yesterday, TMC submitted a filing to the Securities and Exchange Commission (SEC) stating that it had amended the terms for Class B stock warrants to purchase 9.95 million shares of its common stock at a price of $2 per share. Through the filing, the company revealed that it had waived a requirement that would prevent the holders of the warrants from exercising them through a cashless exercise.
In other words, the holders of the warrants do not need to pay the $2 per share exercising price and can instead pay the exercise price with common stock value in exchange for receiving less common stock. The company says it believes that its new approach to the warrants is in the best interest of shareholders because it could reduce the amount of stock issued through the warrants, and investors appear to be excited about the new arrangement.
What's next for TMC?
On Monday, TMC announced that Korea Zinc would be making an $85.2 million investment in the company in exchange for 19.6 million shares of common stock. Per the terms, Korea Zinc will also receive warrants to purchase 6.9 million shares of common stock at an exercise price of $7 per share. The deal will provide TMC with a substantial new capital injection and also signals a high level of confidence in its mining operations and forward stock performance outlook. As evidenced by the recent amending of the previously issued Class B warrants, the deal has also given TMC increased financial flexibility and confidence.
