JPMorgan views the rally in shares of Lithium Americas (LAC) after Reuters reported that the Trump administration is seeking up to a 10% equity stake as part of a Thacker Pass loan renegotiation, along with guarantees that General Motors (GM) will buy the mine’s lithium, as overblown. It is difficult to quantify what fair value a 10% government stake should be valued at “amid unanswered questions such as what, if any, revised offtake agreement(s) could look like,” the analyst tells investors in a research note. JPMorgan adds that GM was already the sole off-taker for Phase 1 of the project, with the right to buy all of Phase 1 material. The firm has a Neutral rating on Lithium Americas. The stock in premarket trading is up 57%, or $1.74, to $4.81.
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