Why TMC The Metals Company Stock Plummeted 25.5% Last Month and Has Traded Flat in April

TMC The Metals Company (NASDAQ: TMC) stock suffered a big pullback in March. The deep-sea mining company's share price moved 25.5% lower in a month that played host to a 5.1% decline for the S&P 500 and a 4.8% slip for the Nasdaq Composite.

TMC's share price moved lower in conjunction with broader risk-off sentiment impacting the market connected to the Iran war. As a company that's still in a pre-revenue state, the mining specialist's share price can see outsized moves in conjunction with macroeconomic and geopolitical headwinds. Its share price is now down 56% from its 52-week high.

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TMC sank in March as investors reduced exposure to stocks

The U.S. and Israel conducted joint strikes on Iran on Feb. 28, kicking off a new conflict that injected substantial bearish volatility into the market in March. While TMC's positioning as a company that could potentially help the U.S. source critical minerals means that the business has some tailwinds connected to rising geopolitical tensions, the stock has a speculative valuation profile and has seen substantial volatility in conjunction with war-related developments. Rising oil prices and other inflationary factors could cause the Federal Reserve to delay cuts for interest rates -- a development that would be bearish for growth stocks.

On the other hand, TMC did deliver some good news for investors last month. On March 9, the company announced that the National Oceanic and Atmospheric Administration had said that TMC's joint application for an exploration license and commercial recovery permit was in substantial compliance with the necessary guidelines.

The announcement was a bullish sign for the company's chances of receiving the necessary permitting needed to begin carrying out exploratory missions and extracting minerals along roughly 65,000 square kilometers in the Pacific Ocean. The area in question is estimated to house roughly 619 million metric tons of wet nodules and could actually have up to 200 million additional tons.

TMC posted its fourth-quarter results before the market opened on March 27, reporting a loss of $0.08 per share on no revenue. The company reported that it had spent $11.4 million to fund its operations in the quarter and said that it closed out last year with cash and equivalents totaling $117.6 million.

What's next for TMC?

At the time of its fourth-quarter conference call, TMC said that it anticipates that it will be granted a commercial-recovery permit needed to begin commercial operations within less than a year. The company expects that it will commence system commissioning in the fourth quarter of 2027 and that its operational ramp will proceed from there. Management also said that the company had initiated its pre-feasibility studies for its Brownsville processing hub and that it anticipated conducting a study for bankable feasibility by the end of this year.

TMC's share price has traded roughly flat in April so far, with the stock up 0.2% against a 3.9% gain for the S&P 500 and a 4.8% jump for the Nasdaq Composite. TMC continues to be a high-risk stock, but shares could deliver significant upside if the company achieves its commercialization timelines and sees continued momentum from there.

Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.