In the captivating realm of the stock market, we find Odyssey Marine (NASDAQ: OMEX), a daring micro-cap junior marine exploration company. This story, however, revolves not around traditional financial fundamentals but centers on a thrilling legal saga with Mexico. The outcome of this long-standing dispute holds the key to an extraordinary financial windfall, and I’m here to shed light on this gripping investment tale.
At the heart of the matter lies the Don Diego deposit, discovered by Odyssey Marine in 2011, nestled within the Mexican Exclusive Economic Zone offshore Baja California. Through its subsidiary, ExO, the company secured a 50-year exclusive exploration concession for the Don Diego Phosphorite project. With 3 out of 4 board seats and shared leadership between OMEX and ExO, the project’s future seemed promising. Additionally, two adjacent concessions, Don Diego Norte and Don Diego Sur, added to the grandeur of the endeavor.
Yet, before the project could set sail, it had to gain environmental approval from SEMARNAT (Mexican Secretariat of Environment and Natural Resources). Odyssey Marine filed an extensive 5k-page MIA (environmental application) in 2014, with initial signs pointing to a favorable outcome.
However, the tide turned after a meeting with Undersecretary Pacchiano, who expressed concerns about the project’s impact on turtles and whales, dubbing them “political issues.” Despite expert opinions stating low risks to marine life, the approval was blocked due to political considerations.
Fast forward to 2017, after a series of appeals and court rulings, Odyssey Marine sought justice under Chapter 11 of NAFTA, claiming damages of over $2.3 billion. The odds of winning such a case, based on historical precedents, seem slim, with only 5 out of 30 similar cases in NAFTA history favoring claimants. Yet, OMEX’s unique circumstances and a unanimous ruling in its favor by TFJA add a glimmer of hope to the equation.
However, this thrilling investment adventure comes with its share of risks. The litigation’s uncertain outcome may lead to deductions from the potential proceeds, including taxes, legal fees, and defaulted debt obligations. The defaulted loan could trigger further legal battles, and the market’s skepticism has weighed heavily on OMEX’s share price.
In conclusion, the Odyssey Marine investment journey offers the allure of an enticing call option or a lottery ticket. If the litigation proves successful, the company’s stock may soar 80-600%, presenting a remarkable opportunity. Nonetheless, the multitude of uncertainties and risks surrounding the case warrant caution, and one should tread carefully in this tumultuous voyage. The brave souls willing to embark on this daring adventure must keep a vigilant eye on unfolding developments and brace themselves for the thrilling twists and turns that lie ahead.