Lithium Americas Corp. (LAC) stock plummeted 7.81% in trading on Friday, marking a significant reversal from the previous day's extraordinary gains. This sharp decline comes as investors reassess the implications of potential U.S. government investment in the company.

The stock's volatility stems from recent reports that the U.S. government is in negotiations to take an equity stake in the Vancouver-based miner. This proposed investment is being considered as a means to renegotiate a $2.3 billion Energy Department loan granted during the Biden administration. The news initially sparked a remarkable 96% surge in LAC's stock price on Thursday, including a 22.6% jump on Wednesday, which marked the company's largest one-day percentage increase on record.

The current downturn suggests a possible correction or profit-taking by investors following the stock's significant gains. It also reflects the market's uncertainty about the long-term implications of government involvement in private companies. This move is part of a broader trend, as the U.S. government has recently taken stakes in several strategic companies, including rare earths miner MP Materials and chip giant Intel Corp. While such interventions have yielded mixed results for shareholders, they underscore the government's growing role in shaping critical industries. As negotiations continue, investors will be closely monitoring any official announcements regarding the U.S. government's potential stake in Lithium Americas and its impact on the company's future in the crucial lithium mining sector.