TMC's 2025 Stock Surge Masks Persistent Deep-Sea Mining Risks

What happened

TMC The Metals Company's stock soared in 2025, fueled by optimism over its deep-sea mining plans for critical minerals like nickel and cobalt. However, the company remains pre-revenue with no commercial operations, as detailed in the latest DeepValue report, which highlights its dependency on uncertain ISA permitting and technology scale-up. Key risks include pending exploitation regulations, environmental controversies, and unproven operational systems at commercial scale. Financially, TMC reported a net loss of $94.9 million for the first half of 2025, with cash of $115.8 million against liabilities of $91.8 million, underscoring its fragile balance sheet. Despite the stock surge, the investment case is dominated by binary outcomes that could lead to significant volatility or losses.

Implication

The stock surge reflects market hype around deep-sea mining potential but ignores TMC's pre-revenue status and high dependency on ISA approvals, which remain unresolved. Environmental and social risks, such as calls for moratoriums, could delay or derail commercialization, impacting stock performance negatively. Liquidity concerns persist, with ongoing losses potentially necessitating dilutive financing if cash burn continues. Monitoring ISA regulatory progress and TMC's technical milestones is crucial, but current fundamentals do not support a bullish stance. Investors are better off waiting for concrete developments rather than chasing short-term gains in this speculative environment.

Thesis delta

No material shift in the investment thesis; TMC remains a high-risk, pre-revenue company reliant on regulatory and execution breakthroughs. The 2025 stock surge appears driven by sentiment rather than fundamental improvements, reinforcing the 'WAIT' recommendation due to unresolved risks.