Remember when your friend told you about that “sure thing” penny stock that was going to make you rich? Well, turns out Uncle Sam has been taking notes – and he just dropped $35.6 million on what used to be a penny stock called Trilogy Metals (NYSE:TMQ). Plot twist: it’s actually working.
Here’s the tea: The Trump Administration just bought a 10% stake in this Vancouver-based mining company, and the stock went absolutely bonkers – we’re talking a 240% jump from $2.09 to over $7 in one day. That’s the kind of move that makes crypto bros jealous.
Why Alaska’s Dirt Suddenly Matters
So what’s got the government so excited about digging holes in Alaska? It’s not gold fever (well, not entirely). Trilogy Metals is sitting on what’s basically a treasure chest of the stuff that makes your iPhone work – copper, cobalt, gallium, germanium, and a bunch of other metals with names that sound like they belong in a sci-fi movie.
The catch? This treasure is buried in Alaska’s Ambler Mining District, which is currently about as accessible as your ex’s Instagram after you got blocked. They need to build a 211-mile highway through the Alaskan wilderness first. Because apparently, getting rich is never easy.
The Government’s New Side Hustle
Here’s where it gets interesting: This isn’t the government’s first rodeo. They pulled the same move with Intel back in August, dropping $8.9 billion for a 10% stake. Seems like someone in Washington discovered the “buy the dip” strategy and decided to make it official policy.
The deal is pretty straightforward – the Department of War (yes, that’s apparently still a thing) is putting up $17.8 million directly to Trilogy, and another $17.8 million to buy shares from their Australian partner South32. They even get warrants to potentially grab another 7.5% of the company, because why not double down when you’re on a roll?
Wall Street Takes Notice
The smart money is paying attention too. Cantor Fitzgerald just slapped a “buy” rating on the stock with a $10 price target – that’s a fancy way of saying “we think this thing’s going higher.” Not bad for a company that was losing a penny per share last quarter and hasn’t turned a profit in years.
But here’s the thing about government backing: it’s like having your rich uncle co-sign your loan. Suddenly, everyone takes you seriously. When Uncle Sam decides your little mining operation is critical to national security, that’s basically a golden ticket in today’s market.
The Bottom Line
Is this the start of a new trend where the government becomes the ultimate diamond-hands investor? Maybe. What we do know is that Trilogy Metals went from penny stock to Wall Street darling overnight, all because someone in Washington decided that controlling our own supply of tech metals might be a good idea.
Whether this Alaska adventure pays off remains to be seen, but one thing’s for sure – it’s a lot more exciting than buying Treasury bonds.