Lithium Americas Corp. (LAC) shares tumbled 5.11% in pre-market trading on Thursday, extending the previous day's 9.09% decline. The slump comes despite a recent deal with the U.S. Department of Energy (DOE) that was initially seen as positive for the company.

The pre-market plunge can be attributed to several factors. Firstly, Canaccord Genuity downgraded Lithium Americas to Sell from Speculative Buy, maintaining a price target of C$6.50. This downgrade appears to have sparked investor concerns, leading to selling pressure. Secondly, the market may be experiencing profit-taking after the stock's impressive 91% gain over the past month, fueled by speculation about the DOE deal.

The recent agreement with the DOE gives the government a 5% stake in both Lithium Americas and its Thacker Pass lithium project in Nevada. While some analysts, like Wedbush's Dan Ives, hailed the deal as a "game changer," investors seem to be grappling with potential dilution concerns and skepticism about the long-term impact of government involvement. The contrasting views highlight the uncertainty surrounding the lithium market and the complex dynamics of government partnerships in strategic industries. As the market digests this news, LAC's stock price volatility may continue in the short term.