The Andromeda Metals Ltd (ASX: ADN) share price is surging higher on Friday despite no news having been released by the company.
However, its enthusiastic performance might be in response to recent turbulence.
At the time of writing, the Andromeda share price is 13 cents, 31.58% higher than its previous close.
For context, the broader market is also in the green today, though, not to such a dramatic extent. Right now, the All Ordinaries Index (ASX: XAO) and the S&P/ASX 200 Index (ASX: XJO) are both up around 0.5%.
So, what could be driving the Andromeda share price today? Let’s take a look.
What’s pushing Andromeda’s stock higher on Friday?
Andromeda’s stock is launching nearly 32% on Friday after tumbling 45% over the previous two sessions.
The halloysite-kaolin-focused producer of industrial metals released the definitive feasibility study for its Great White Kaolin Project on Wednesday.
The project was a joint venture between Andromeda and the previously ASX-listed Minotaur Exploration.
The pair merged in February, with Minotaur shareholders each receiving 1.5 shares in Andromeda for their investment.
Under its definitive feasibility study, the Great White Kaolin Project was given a valuation of $613 million and an internal rate of return of 36%.
Previously, the project’s prefeasibility study indicated a valuation of $736 million and an internal rate of return of 175%.
On the release of the latest study on Wednesday, the Andromeda share price tumbled 33%. It ditched another 16% the following day.
Thus, today’s movements might be the market’s way of correcting the company’s valuation following the sell-off.
Andromeda share price snapshot
Today’s gains haven’t been enough to boost the industrial metals stock back into the long-term green.
Right now, the Andromeda share price is 34% lower than it was at the start of 2022. It has also fallen 57% since this time last year.
The post Why is the Andromeda share price skyrocketing 32% on Friday? appeared first on The Motley Fool Australia.
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Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. 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.
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