Why Standard Lithium Stock Is Still Going Up

Shares of Standard Lithium (NYSEMKT: SLI) surged as much as 18% in early trading Thursday before turning tail and giving back much of their gains. Despite the reversal, as of 2:22 p.m. ET, the stock remains up 7.8% -- and it's no mystery why.

Inspired by news of Rio Tinto Group's $6.7 billion bid to acquire Arcadium Lithium (NYSE: ALTM) yesterday, investors are glomming on to Standard Lithium -- a $2 Lithium stock with neither profits nor even revenues -- as a "cheap" way to bet that Lithium prices are about to bounce.

It's not a completely logical idea. Rio Tinto did, after all, say yesterday it was buying Arcadium Lithium as a "countercyclical expansion into a high-growth market" -- hinting that it believes the cyclical lithium mining sector is near-bottom, and that both demand for and prices of lithium are ready to grow again.

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Source Fool.com