Radius Recycling's Surge Justifies A Reevaluation

2025-03-14 15:27:50 ET

Summary

• Radius Recycling, Inc. shares surged after agreeing to a $30 per share buyout by Toyota Tsusho, offering a 115% premium over the closing price.
• Despite operational challenges and declining revenues, the buyout provides a significant 77.8% upside since my “buy” rating in June last year.
• Toyota Tsusho's acquisition reflects their strategic interest in metals recycling, but they assume all risks amid potential market recovery and volatility.
• Given the substantial premium and limited future upside, I recommend downgrading RDUS stock to a “hold” to align with broader market performance expectations.

After the market closed on March 13th, shares of Radius Recycling, Inc. ( RDUS ) skyrocketed, more than doubling in after-hours trading. This came after news broke that the business had agreed to be acquired by a much larger firm by the name of Toyota Tsusho ( TYHOF , TYHOY ) in an all-cash transaction worth $30 per share. This is a monumental amount of upside for such a short window of time. And honestly, for those who have owned the stock for a while, it's probably going to be bittersweet....

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