QS Research · Michael Burry's Scion Capital analyst template · 2006
TMC the metals Co Inc. (TMC)
As of 2026-11-09 · 12/15 boxes filled from SEC filings and market data
Conclusion: WATCH
Conviction low · base case -90% · downside -94% · upside +50%
TMC is still pre-revenue with TTM EBIT of -$205.8M and net income of -$305.6M, so earnings multiples are not meaningful; the only hard value is $98.7M cash against a $902.7M EV and -$27.4M book equity. That cash is $0.22/share ($98.7M/441.14M), or -90.1% from $2.27, which I use as the base; a one-year TTM FCF burn of $43.8M leaves $54.9M, or $0.12/share, as the downside. The upside depends on the dated NOAA permit/funding path, which management still expects ahead of Q4 2027 commissioning but says has slipped a few months; I give that option +50% ($3.41) rather than the $10 sell-side target because no revenue or EBITDA is in the TTM base (S29, S31, S59). Hence watch, not short: the base is far below the price, but the permit/funding binary can exceed the short-rule upside cap.
Key numbers
- Share price: $2.27
- Market cap: $1.00B
- Latest financial period: TTM to Jun 30, 2026
The 15 boxes
- ✓ 1. Long-form business notes
TMC is a development-stage deep seabed minerals developer, not a producer: the latest 10-K says it is in the development stage, has not obtained commercial recovery or related offshore/onshore permits, and plans to make money by collecting and processing polymetallic nodules into nickel-, cobalt- and copper-bearing intermediates/cathodes plus manganese silicate. The oldest annual report here is a FY2020 blank-check company, so the business has changed from a merger vehicle to a development-stage miner with NOAA/ISA regulatory tracks, technical reports and partners including Allseas and Glencore. FY2025 XBRL shows operating income -$140.1M, net income -$319.8M, operating cash flow -$42.9M and cash $117.6M; the sources give no revenue, segment or unit-economics data.
- ✓ 2. Competitive advantage
No durable advantage is evidenced: there is no revenue in the XBRL record, so no margin or return history exists to test pricing power — only operating losses of -$140.1M in FY2025, -$81.3M in FY2024 and -$72.4M in the fiscal year ended 2023-12-31. The only arguable moat is licences: two ISA exploration contracts over CCZ nodule areas (NORI expiring July 2026, TOML January 2027) plus NOAA priority rights, none of which has ever produced a commercial recovery permit or a tonne of metal. Competition is severe — Chinese or Chinese-funded producers dominate nickel, cobalt and manganese alloy output on scale and cost, and 17 other entities already hold ISA nodule exploration contracts. The company competes for the same vessels, equipment, people and capital as those rivals, while its collection system depends on Allseas under a term sheet that is still non-binding.
- ✓ 3. 10-Q takeaways
The latest quarterly report in the sources is the Q2 2026 10-Q (quarter ended 2026-06-30, filed 2026-08-13), not a Q3 report. TMC is still pre-revenue: Q2 2026 net loss was $60.1 million versus $74.3 million in Q2 2025, but the quarter's loss was cut by an $18.5 million non-operating, non-cash dilution gain while exploration and evaluation expense jumped to $56.1 million (including $37.2 million of Allseas charges) and G&A rose to $15.6 million. Liquidity was about $143 million at June 30, 2026, with $20.1 million of cash used in operations in the quarter, and the only forward numbers given are operational (permit ahead of targeted Q4 2027 commissioning), not financial guidance.
- ✓ 4. Corporate governance
Filled; members read this box.
- ✓ 5. Overview of the prior 3 years of 8-K filings
Filled; members read this box.
- ✓ 6. Other significant filings
Filled; members read this box.
- ✓ 7. Chronology of significant news and events
Filled; members read this box.
- ✓ 8. Comparables valuation interpretation
Filled; members read this box.
- ✓ 9. Insider trading interpretation
Filled; members read this box.
- ○ 10. Earnings-call notes
- ○ 11. Impression of the shareholder letter
- ○ 12. Scuttlebutt overview
- ✓ 13. Valuation and risk/reward summary
Filled; members read this box.
- ✓ 14. Current price suppression and potential catalysts
Filled; members read this box.
- ✓ 15. Conclusions
The call above.
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