MMX, a mining company created by Eike Batista, rose again this Friday (9/10), with an increase of 50.8%, conquering an appreciation of 810% this week. It is necessary to consider that the values were very low, so any variation presents a high percentage. In the period, the price of the paper jumped from R $ 1.77 to R $ 16.11. To compare, in the same period, the Ibovespa rose 3.7%.
The company that was already a star in the stock market a decade ago has been in the process of judicial recovery since 2016 and is still a long way from the peak prices it had in 2009. But the mining company shone on the stock market in early October, multiplying its market value for nine.
Requested reopening of mine in court
The positive wave is fueled by the expectation that the mining company will be able to recover in court the right to mine ore in a mine and, with this operation, take the first steps to exit the judicial recovery.
On September 30, the company issued a statement to the market, saying it is asking the courts to control the Emma mine. The note went unnoticed by most investors at first. But earlier this week, the volume of business with the paper had already tripled, reaching R $ 36 thousand in a trading session.
Stock exchange wanted explanations on high
Then B3, the Brazilian Stock Exchange, entered the scene, asking the company for explanations regarding the atypical movement. In the response sent to the Stock Exchange, MMX repeated the information about the request for rights to the mine, highlighting that, if resumed, exploration may be of “great economic relevance”.
“The company believes that the recent atypical fluctuations are related to the material fact disclosed last week, on September 30, 2020. In the relevant material fact, the company informed the market that it filed a petition with the court of its judicial recovery, seeking to recover the Mina Emma asset, whose exploration may be of great economic relevance for the company. The company also informs that it is not aware of any other relevant act or fact that could justify the atypical fluctuations identified by B3 “, said MMX in the note last Wednesday (6).
From that note on, the information effectively gained more space, and the daily volume of business with MMX’s shares on the Stock Exchange jumped from R $ 36 thousand to R $ 290 thousand. The appreciation of paper went hand in hand, at the same acceleration.
Analysts say the news is good
Market professionals say that the reactivation of MMX’s operations may lead the company to generate revenue, opening space for the firm to exit the judicial recovery, including attracting money from new investors.
Eike Batista is still one of the main shareholders of MMX. He does not hold a position in the management or the Board of Directors of the mining company. But the mere presence of a businessman with lawsuits in the list of controllers is an obstacle to the development of the project, say market professionals.
The problems of the MMX
These market professionals point out that the leap in MMX’s shares this week needs to be contextualized. This is because the company, which debuted on the stock exchange in 2006, was already worth R $ 3,484.45 in May 2008. Or the equivalent to R $ 6,737.00 at current values adjusted by the IPCA.
In times of high value, in 2008, MMX was well regarded because of expectations that several projects for the production of iron ore and even finished products, such as steel, would lead the group to become a new Vale.
The problems started in 2011, when MMX failed to fulfill ore delivery contracts. It was the first sign to the market of the project’s operational capacity problems. Then, investigations of the role of businessman Eike Batista with government officials emerged, in a sequence of processes that took the company’s founder to jail.