What happened Shares of Comstock Mining (NYSEMKT: LODE), a Nevada-based gold and silver miner with ambitions to enter the market for recycling lithium-ion batteries, crashed in morning trading today. As of 1:30 p.m. EST on Wednesday, Comstock remains down 11.1%. Image source: Getty Images. So what In a report released today, short-seller Spruce Point Capital Management warns that "sector hype" and investors ignoring valuations and failing to do their due diligence have artificially inflated the stock of certain companies, Comstock Mining among them. Blasting the stock as an "egregious pretender" with "grand ambitions to enter the market for EV battery recycling," Spruce Point urges investors to sell Comstock. The company's expansion into EV battery recycling "is fraught with risks and has a high degree of likelihood to fail," Spruce Point says. The analyst also says Comstock has conflicts of interest with related companies American Battery Metals and Aqua Metals (NASDAQ: AQMS). Now what Spruce Point says it's especially concerned with Comstock's $11 million investment, alongside Aqua Metals, to acquire majority ownership of LiNiCo, a start-up lithium-ion battery recycler. As Spruce Point argues, Comstock has promised that LiNiCo will produce a "$30 million profit stream," but it's illogical to believe that LiNiCo would sell an interest in such a profitable business for an "implied valuation" of less than $20 million (the combined investment by Comstock and Aqua Metals). The implication being that LiNiCo probably won't produce anywhere near that level of profit, and Comstock's investment will be a bust. 10 stocks we like better than Comstock MiningWhen investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.* David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and Comstock Mining wasn't one of them! That's right -- they think these 10 stocks are even better buys. See the 10 stocks *Stock Advisor returns as of February 24, 2021 Rich Smith has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.Source