James Bay Lithium (ASX:JBY): Why has it been running so hot this week?

James Bay Lithium (ASX:JBY) is more than double its IPO price in less than a week of trading. Why is it running so hot in an IPO market that has been bearish for nearly two years now?

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Why investors want a piece of James Bay Lithium (ASX:JBY)

You might have guessed it is because of a lithium stock that has potential for a discovery. The company is named after James Bay in Canada where its ~224km squared portfolio lies. It is right near the deposits of other ASX lithium players including Patriot Battery Metals (ASX:PMT) and Sayona (ASX:SYA) which have a resource of over 160Mt @ 1.3% lithium.

Investors think the company could have a significant resource at its project and re-rate as it is unlocked.

Should I buy it?

It all depends on whether or not you are comfortable with the risks of early stage explorers. This is particularly true for companies such as James Bay Lithium that have run hot immediately post-IPO. If the company can discover some lithium, investors who got in at IPO will make even more money. But if it cannot, there’ll be major losses.

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