Catching Up: Stupid Stock of the Week
Plus, Checking in on DJT.
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My wife and I spent much of last week at Disneyland with our two grandkids – both boys under five. That means there was zero downtime. The kids had a blast. The adults were exhausted.
But rather than talk about Disney, which reports earnings Wednesday, let’s get to that stupid stock...
Drumroll, Please...
Given my recent work on MP Materials and rare earths, it should be no surprise that I’m suddenly seeing “rare earth” ideas. This one, however, takes the cake...
The company is Dateline Resources. And before I go further, let me be clear: This is a penny stock – and I do mean penny.
I’m loath to even mention it, but it’s that stupid and seemingly obvious as the ultimate in a stock promoter’s stock promotion that I can’t resist.
Speculation on Steroids...
Dateline is based in Australia, which is where its stock trades. It also trades on the pink sheets in the U.S., where it is seeking to be upgraded to the OTCQB Venture Market – a step-up, of sorts, for speculative stocks.
Adding fuel to this speculative fire – and to a stock nobody has ever heard of – last week President Trump gave a shout out to the company’s Colosseum mine in California, saying...
The Colosseum Mine, America’s second rare earths mine, has been approved after years of stalled permitting.
Without skipping a beat, Dateline issued an announcement that was headlined, “U.S. Presidential Recognition...”
I have a few theories, which I’ll keep to myself, but I digress…
The Colosseum mine happens to be 10 miles from MP’s Mountain Pass rare earths mine, and was acquired from Barrick Gold in 2021.
That’s right. It was acquired from Barrick Gold, because... it's a gold mine. But the original announcement of the deal – a few months after MP went public – included mention of the mine’s proximity to Mountain Pass, which it added is “America’s only rare earths mine.”
Except…
Nobody really knows what kind of rare earths are in the mine, let alone gold. The fine print to a 2024 “scoping study presentation” on gold in the mine says (emphasis mine)…
There is a low level of geological confidence associated with Inferred Mineral Resources and there is no certainty that further exploration work will result in the determination of Indicated or Measured Mineral Resources or that the production target itself will be realised.
The Study is based on the June 2024 Mineral Resource Estimate, is based on low-level technical and economic assessments, and is insufficient to support estimation of Ore Reserves or to provide assurance of an economic development case at this stage, or to provide certainty that the conclusions of the Study will be realised.
As for rare earths: The company has offered few updates on its findings, including one in its 2024 annual report that suggests it’s still trying to figure out what’s there.
In Reality...
I checked with an Australian rare earths and mining expert I know, who said he had never run into Data Resources. He also mentioned that it's in West Perth, which sounds an awful lot like Australia’s version of Vancouver for stock promotion.
As he explained...
There is an investment thesis in resources called ’nearology’ – when a discovery is made, the next license over starts selling their prospects. My understanding is that this project is 10km away from MP, and that may be termed ‘farology’. They could have a completely different host rock, with a massive difference in age, geology etc.
To give the story some credibility, Dateline also highlighted a comment from the U.S. Bureau of Land Management, which said that “the resumption of mining at Colosseum Mine, America’s second rare earth elements mine, supports efforts to bolster America’s capacity to produce the critical materials needed to manufacture the technologies to power our future… Interior continues to support industries that boost the nation’s economy and protect national security.”
And even though the government never called the Colosseum mine a “strategic asset,” Dateline used the word “strategic” 10 times in the announcement... and the phrase “strategic asset” once.
Still, as my Australian friend says...
So maybe they have similar host rock, but haven’t really even started exploring for rare earths.
What’s that line Mark Twain said about a gold mine being a hole in the ground with a liar next to it?
I wonder what he’d say about rare earth mines.
Interpret at will.
Speaking of Stock Promotions...
I haven’t looked at the Trump Media and Technology Group DJT 0.00%↑ in well over a year. Let’s just say, it was destined to be one of those kinds of stocks... that are magnets for controversy.
Then I saw a piece written last week in Barron’s by my old friend Allan Sloan, who is known in business journalism circles as one of the greats.
His focus was on the egregious pay package for DJT’s CEO, Devin Nunes. As Allan writes...
I’ve been reading proxy statements since I became a business journalist more than 50 years ago, and don’t remember ever seeing a CEO pay package like Nunes’ that was so much greater than the revenue of the CEO’s company.
He walked through his observations, but it was this part that really caught my attention (emphasis mine)...
When I asked Trump Media’s spokeswoman about Nunes’ compensation relative to the company’s revenue, I got the following email:
‘Transparent hit pieces like this one, arguing that it’s a scandal that Trump Media tries to pay its officers competitive salaries based on recommendations and approvals by compensation consultants, board members, lawyers, and others, are laughably predictable inanities that are read by few people and believed by even fewer.’
Allan went on to write.
I asked the spokeswoman several times to tell me who the compensation consultants were so I could talk with them. I got no response.
Of course, he didn’t. Because it’s highly unlikely that any reputable compensation consultant would recommend such a pay package.
Then again, in this new world order – rules? What rules?
DISCLAIMER: This is solely my opinion based on my observations and interpretations of events, based on published facts and filings, and should not be construed as personal investment advice. (Because it isn’t!) I have no position in any stock mentioned here. I’m under no obligation to update or alert subscribers if an when I make changes to any of my holdings.
Feel free to contact me at herb@herbgreenberg.com.