The stock of Comstock Mining Inc. (LODE) gained in the pre-market after the company announced their acquisition of majority ownership of LiNiCo in a press release. The stock of LODE was valued at $1.45 in the pre-market at the time of this writing. It is a gain of more than 11.54% from the previously closed value. At the end of the last trading session, the stock of LODE closed at $1.30. The volume of the stock traded in the last trading session was around 715.39K shares.
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Reason for the LODE stock gain
On 5th Jan 2022, Comstock Mining Inc. (LODE) announced in a press release about the acquisition of ownership in LINICO Corporation. They acquired 3,129,081 common stock shares of LINICO Corporation from the founder of LiNiCo, Michael Vogel, in exchange for the 3,500,000 restricted Comstock common stock shares. Comstock Mining Inc. (LODE) also acquired additional 4,075 Series A preferred shares increasing its overall ownership from 45% to 90%.
Comstock said that the decision of increasing their investment in LiNiCo was further expansion of their plan to create high revenue-generating procedures that tap into huge markets and ease the supply chains of increasingly insufficient natural resources. Comstock believes that LiNiCo’s cutting-edge extraction technologies will result in being the best, most sustainable, and valuable methodology for the production of lithium and other electrification products from both recycled batteries and purely natural resources. They said that increasing their stake to about 90% will allow us to control LiNiCo’s business plans, revenue, and earnings. This way the shareholders of Comstock can take part in the expected substantial positive result of LiNiCo’s business and technologies on the valuation of Comstock.
Effect on the common stock
As soon as the news of the acquisition by Comstock hit the market, the stock of Comstock Mining Inc. (LODE) surged in the pre-market. The acquisition depicts that the strong balance sheet of the company as well as the implementation of their plans for the upcoming years. Investors seem to be putting their trust in the stock of Comstock Mining Inc. (LODE).
Conclusion
The acquisition will have a significant effect on the upcoming income statements of Comstock Mining. The reason behind the acquisition is to fully control the operations of the LINICO and expand it to its full potential, which will ultimately benefit the valuation of Comstock Mining.
