TMC Stock: The CFO's 'Short Squeeze' Claim and Reddit's Reality Check

The Curious Case of the TMC Short Squeeze (Attempt)

TMC, the deep-sea mining company, saw its stock jump 24% in after-hours trading on November 27th. The catalyst? CFO Craig Shesky issuing a rather public warning to short sellers during a Rock Stock Channel podcast interview. It's a bold move, especially considering the stock closed up only 7% during the regular session that day.

Let's unpack this. Shesky essentially dared short sellers, who currently hold 13.7% of TMC's shares (roughly 25 million), to keep betting against the company. He hinted at the possibility of production starting before the Q4 2027 target if regulatory clearance comes faster than expected. This, coupled with the company's $115 million in cash and access to over $430 million through existing warrants, seems to be the fuel for the after-hours surge.

But here's where my analyst brain kicks in. A 24% jump after hours, while significant, needs context. TMC's stock has been on a rollercoaster this year, gaining as much as 854% before pulling back 49% from October highs. So, is this a genuine shift in investor sentiment, or just another blip in a volatile stock? The after-hours surge suggests some investors are indeed focusing on the long-term potential of deep-sea mining, specifically the extraction of copper, nickel, cobalt, and manganese for EVs and clean energy. But is it enough to trigger a sustained squeeze? The Metals Company (TMC) Stock Jumps 24% on CFO’s “Short Squeeze” Comments - parameter.io

Parsing the Promises and the Pitfalls

Shesky's optimism about early production hinges on faster regulatory clearance. That's a big "if." Deep-sea mining is a regulatory minefield (pardon the pun), and there's no guarantee that approvals will come quickly, or at all. President Trump’s April executive order, intended to reduce US dependence on Chinese mineral supply chains, certainly opened doors. But navigating government talks with the Department of Energy and the Pentagon is a complex process, even with political tailwinds.

A recent Q3 report showed a net loss of $184.5 million, a stark contrast to the $20.5 million loss last year. That's a massive increase in losses. Now, pre-production companies often bleed cash, but that number raises eyebrows. Is the cash burn sustainable, even with the $430 million in potential warrant exercises? Water Tower Research analyst Dmitry Silversteyn believes TMC might be self-sufficient soon. But I need to see the data to back that claim up.

And this is the part of the report that I find genuinely puzzling. If TMC's seabed resources are valued at $23.6 billion (as per the August technical assessments), and the company's market cap is only around $2 billion, there seems to be a massive undervaluation. Why the discrepancy? Is the market discounting the regulatory risks so heavily that it's ignoring the potential upside? Or are those resource valuations overly optimistic? It's like valuing a gold mine based on the gold in the ground without considering the cost of extraction and permitting.

This whole situation reminds me of a high-stakes poker game. Shesky is essentially bluffing, betting that he can scare the short sellers into folding. But a bluff only works if you have the chips to back it up. Does TMC have enough cash, regulatory certainty, and genuine investor confidence to pull this off? Or is this just a temporary reprieve before the stock resumes its downward trend?

Is This the Bottom, or Just a Bump?

Shesky's move is high-risk, high-reward. If he's right, and TMC can accelerate production, the short squeeze could be epic. If he's wrong, the short sellers will have a field day. My gut tells me there's more downside risk than upside potential here. The regulatory hurdles are significant, the cash burn is concerning, and the stock's volatility makes it a dangerous game for both longs and shorts.