Why Arcadium Lithium Stock Was Soaring This Week
Formerly beaten-down metallurgy stock Arcadium Lithium (NYSE: ALTM) saw a dramatic reversal in its fortunes over the past few days. First on rumors, then shortly thereafter on solid news that it was being acquired, the company's share price improved dramatically in a very short span of time. According to data compiled by S&P Global Market Intelligence, as of early Friday morning the stock was up almost 80% week to date.
Very few newsworthy events would make a stock leap in price like that; the No. 1 suspect is usually a buyout. Sure enough, international mining conglomerate Rio Tinto announced Wednesday it agreed to buy Arcadium Lithium for $5.85 per share in an all-cash deal valued at $6.7 billion. Rio Tinto obviously wanted the company badly, as the purchase price is 90% higher than Arcadium Lithium's closing price at the end of last week.
The acquirer is opening its wallet because, as it wrote in a press release on the acquisition, "The transaction will bring Arcadium's world-class, complementary lithium business into Rio Tinto's portfolio, establishing a global leader in energy transition commodities -- from aluminum and copper to high-grade iron ore and lithium."
Source Fool.com
