COBALT
Updated
I'v been looking into cobalt for about 2 years now. This is a very volatile and underdeveloped market. Futures non-existent, just LME but lot size is 1 metric ton... you can gain indirect exposure through mining companies stock, or more direct via streaming companies (basically commodity hodlers that have contracts to buy in bulk from miners and who then warehouse it for speculative purposes). Yeah sounds dodgy af...
Cobalt27 is one such company that I have some participation in. I can in no way vouch for the actual cobalt stock held by this company. DYOR. But otherwise this sector is almost impossible to enter. But why enter at all? Because electric vehicles use lithium ion batteries which would otherwise explode if it wasn't for the cobalt additive. The same goes for all mobile devices which all use lithium ion batteries these days.
The chart shows the blue area, which is the cobalt price (unfortunately LME stopped providing this data for free in February!!! that's why it goes flat). The price per ton is currently trading around
39K - that's roughly $1.21 per troy ounce. As you can see we recently came out of a crazy bubble which started in 2016 - I think we more or less bottomed, but that's opinion and not necessarily fact. Looking at the course of Cobalt27, you can see that the share price more or less followed the trend of the cobalt price. This correlation is better than mining stock imo and is an easy way into the market, if not exactly without risk.
Cobalt27 is one such company that I have some participation in. I can in no way vouch for the actual cobalt stock held by this company. DYOR. But otherwise this sector is almost impossible to enter. But why enter at all? Because electric vehicles use lithium ion batteries which would otherwise explode if it wasn't for the cobalt additive. The same goes for all mobile devices which all use lithium ion batteries these days.
The chart shows the blue area, which is the cobalt price (unfortunately LME stopped providing this data for free in February!!! that's why it goes flat). The price per ton is currently trading around
39K - that's roughly $1.21 per troy ounce. As you can see we recently came out of a crazy bubble which started in 2016 - I think we more or less bottomed, but that's opinion and not necessarily fact. Looking at the course of Cobalt27, you can see that the share price more or less followed the trend of the cobalt price. This correlation is better than mining stock imo and is an easy way into the market, if not exactly without risk.Note
It looks like Cobalt 27 is going to be spun off. I had hoped that it wouldn't happen, but 2 of the major opponents have just signaled they will support the deal. Basically it's a total scam:
The managers used to work for the majority shareholder Pala. Pala now looks set to acquire the remaining shares at a nominal price of C$4.00 + 1 share in the new company Nickel 28 (LOL!!!). Don't mind that the current price is greater than 4 dollars Canadian and that Cobalt has quite obviously bottomed. Oh did I mention the managers are getting a juicy multi-million $ payout from - you guessed it - Pala.
So basically if you bought Cobalt27 anytime before Feb 2019 you're gonna be forced to sell the bottom at C$4 to the real owners of Cobalt 27 (who always were the real owners imo).
Shareholder vote is on Oct 10. Pretty sure which way it's gonna go. I will keep an eye on the price to see whether it's worth selling my shares before, or accept the lower C$4 + Nickel28 share. (Nickel is now at a yearly high)
Trade closed manually
Closed position at C$4.45It's strange that the price keeps going up, despite shareholders voting to spin off the company at C$4.00 a share and the court now having validated the sale. Anyway took profit. I'll have to look for new cobalt opportunities now.
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