Shares of lithium mining stock Piedmont Lithium (NASDAQ: PLL) soared 15.5% through 10:05 a.m. ET Thursday as investors continued digesting news of Piedmont’s planned merger with Australia’s Sayona Mining.

Here’s the thing: News of this merger first broke Monday night, and when investors first heard it… they didn’t seem to like it much. At first, in fact, investors ignored the news — Piedmont stock closed Monday before the announcement at $12.25 a share. It closed Tuesday after the announcement at $12.25 per share, too.

Investors’ second reaction was to sell off Piedmont Lithium stock — by 14.5% Wednesday.

And now here we are on Day 3, and Piedmont stock is up 15.5%. So, is this good news or bad?

Piedmont’s big Australia news

Piedmont and Sayona characterize their deal as an “all-stock merger,” leaving shareholders of each company owning about 50% of the new “MergeCo” (the working title for the company post-merger) after the deal closes in the first half of 2025.

Piedmont CEO Keith Phillips noted that “MergeCo will be North America’s largest lithium producer,” focusing on hard-rock mining of lithium-containing spodumene minerals. Based in Australia and led by Sayona CEO Lucas Dow, MergeCo will retain listings both in Australia and on the Nasdaq. (Presumably, the first order of business of the new company will be to choose a new name).

Wall Street analysts are reacting to the news by upgrading Piedmont and downgrading Sayona. According to Australian investment bank Macquarie, both stocks are now officially rated “neutral.”

Is Piedmont stock a buy?

Logistically, the merger will be accomplished by paying each Piedmont shareholder American depositary shares corresponding to 527 Sayona shares for each Piedmont share currently owned. Each Australian share currently costs $0.03.4, so Piedmont’s shares would be worth about $17.92 if the merger goes through.

Considering that Piedmont stock currently costs only about $12 a share, below its pre-news price and way below its value if the merger is consummated, there’s really only one logical move for investors to make if they think the merger will happen: Buy Piedmont Lithium stock.

Should you invest $1,000 in Piedmont Lithium right now?

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Rich Smith has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Macquarie Group. The Motley Fool has a disclosure policy.