Cobalt Blue (ASX:COB) share price shot up 42% this afternoon. Here’s why.

The Cobalt Blue share price has surged 42% today, following a response the company submitted to the ASX on trading of its shares.
The post Cobalt Blue (ASX:COB) share price shot up 42% this afternoon. Here’s why. appeared first on The Motley Fool Australia. –

Rocket launching into space

The Cobalt Blue Holdings Ltd (ASX: COB) share price has rocketed to a 52-week high today, after the company responded to the ASX regarding its share price movements recently.

In today’s mid-session release, the company denied any knowledge of insider information that might have caused the share price to surge recently, notably a 14% spike on 8 January.

Following the release, the Cobalt Blue share price shot up 42% to 35.5 cents before closing at 34 cents.

Why did the Cobalt Blue share price surge today?

On 8 January, Cobalt Blue received a “please explain” from the ASX after shares in the company jumped almost 14% despite no news being announced.

The company today advised that it was “not aware of any explanation for the price change and increase in volume in the securities of Cobalt Blue, other than as referred to in previous ASX announcements”.

However, the company noted there were a number of factors that could explain investor interest in Cobalt Blue securities.

The company said that cobalt was a critical ingredient for high-performance lithium-ion batteries, which in turn are used globally to power electric vehicles (EV) and energy storage systems (ESS).

As many countries move towards clean energy, more subsidies on EV vehicles are being rolled out. These are significant, effectively subsidising between 20% to 35% of the purchase price of EVs in the European Union, for example – and turning the bloc into the largest global market in EV.

The company also said that the upcoming Biden Clean Energy plan in the United States includes a US$400 billion investment supporting the roll out of 25 million EVs, which will be another tailwind for the company.

In addition, the cobalt market has increased significantly from US$12/lb in April 2020, to more than US$19/lb at this time. It believes the cobalt price is on track to retrace its four-year longer-term average price of US$25/lb.

And finally, Cobalt Blue says that its Broken Hill-based Pilot Plant is on track to operate from February 2021, as already announced to the market on 21 December 2020.

About the Cobalt Blue share price

Before today’s surge, the Cobalt Blue share price has risen by almost 78% in the last 12 months. Including today’s move, the share price has increased 115% in that period.

The Cobalt Blue commands a market valuation of around $61 million.

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Motley Fool contributor Eddy Sunarto has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post Cobalt Blue (ASX:COB) share price shot up 42% this afternoon. Here’s why. appeared first on The Motley Fool Australia.

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