Alcoa Shares Soar 4.74% on Ma'aden Divestment

Alcoa Corporation (AA) shares surged 4.74% intraday, reaching their highest level since March 2025, marking a three-day winning streak with a cumulative gain of 10.71%.

The strategy of buying AA shares after they reached a recent high and holding for 1 week showed poor performance over the past 5 years. The annualized return was -0.58%, significantly underperforming the market. This indicates that relying on recent highs and short-term holding periods may not be an effective strategy for AA or similar stocks.

Alcoa Corporation recently announced the successful completion of a significant transaction involving the sale of a 25.1% stake in the Ma'aden Joint Venture to the Saudi Arabian Mining Company. This deal resulted in Alcoa receiving approximately 86 million shares of Ma'aden, valued at around $1.2 billion, along with an additional $150 million in cash. The transaction is anticipated to generate a substantial gain of about $780 million in other income for Alcoa during the third quarter of 2025. This strategic move is expected to streamline Alcoa's global operations and enhance financial transparency. Following the transaction, Alcoa retains a 2% ownership in Ma'aden, with plans to hold these shares for at least three years, allowing for the potential sale of one-third of the shares annually after the third, fourth, and fifth anniversaries of the closing date. This divestment and the projected financial benefits are likely key factors driving the recent surge in Alcoa's stock price.