Molycorp Earnings Surprise: 'Pain Ahead' For Shorts? [View article]
The quirky thing about MCP vs. short sellers is that we know MCP's financial results. However, we don't know how much shorts have lost on their trades.
Molycorp Earnings Surprise: 'Pain Ahead' For Shorts? [View article]
EMTrader,
I don't think added supply from MCP will depress prices further. The company's cash burn was so impressive because it slowed planned capex. The interim CEO said even if the Mountain Pass expansion is finished, it won't run at 20k capacity unless demand warrants it.
Molycorp Earnings Surprise: 'Pain Ahead' For Shorts? [View article]
Hoff,
With the gain from the calls, I actually turned a profit on my trades.
(i) I think the CEO was referred to as "interim" when he first took over and I haven't seen an official press release where he has taken the job permanently.
(ii) Molycorp is seeking additional funds in the form of a revolving credit facility. Secondly, no the interim CEO did not say the company was seeking additional equity. However, he didn't rule it out as a possibility if cash flows remain negative.
(iii) The company reported a loss attributable to shareholders of $47MM, its third consecutive quarterly loss. That doesn't sound like "out of the woods" to me.
Molycorp Earnings Surprise: 'Pain Ahead' For Shorts? [View article]
Flann,
The shares closed above $7 because of massive short covering. The stock will move lower next week. With all of the short covering, I don't think we really know how far MCP would fall given its quarterly losses. Shorts have created a synthetic floor on the stock. Every time it falls below a certain level, it rises quickly on light volume.
Molycorp Earnings Surprise: 'Pain Ahead' For Shorts? [View article]
VM,
I'm just pointing out something that I think may be mispriced and may impact the shares or perception of the stock going forward. If you don't think it's relevant then so be it, but some investors may consider it important. Also notice how reports are surfacing about what a great quarter it was and how the company exceeded last quarter's results; actually, 4Q results included a $258MM write-down.
Molycorp Earnings Surprise: 'Pain Ahead' For Shorts? [View article]
Johnson,
I think 1Q 2012 does not include financial results of Neo. Neo wasn't acquired until June 2012. 1Q 2013 includes Neo whose operations are included in the Magnetic Materials segment.
Molycorp Earnings Surprise: 'Pain Ahead' For Shorts? [View article]
Sarcastic Processor
That's what I heard. He said directly that even if he completed the Clor-Alkali plant, the company would not run at 20k mt capacity unless demand justified it. It is all speculation at this point. We won't know what will actually happen - production or cost/kg - until the plant is completed.
Molycorp Earnings Surprise: 'Pain Ahead' For Shorts? [View article]
stocks3066
Just in case the company reported better than expected earnings and short sellers sent the stock higher. This scenario actually happened (over 60MM shares traded). The profit on the calls more than covered the losses on the puts.
Molycorp Earnings Surprise: 'Pain Ahead' For Shorts? [View article]
Jason,
The market had built in a near bankruptcy scenario. When results were not as bad as anticipated, people started going off about the turnaround story and what a great job management is doing. If MCP had announced these same results last quarter, the stock would have sold off. The interim CEO even intimated the company may have to return to the capital markets again over the next few quarters.
Molycorp Earnings Surprise: 'Pain Ahead' For Shorts? [View article]
VM,
I know they stockpiled inventory and that the drop in REE prices are driving down the company's profitability. I've been saying that for weeks. As far as profitability is concerned, "real results" are all I have to go on in estimating the market value of Neo. Also, if I am obsessing needlessly over book a book item, why doesn't management just write it off since it doesn't matter?
Molycorp Earnings Surprise: 'Pain Ahead' For Shorts? [View article]
harkvasa,
If MCP can survive the next 2-3 quarters, it could get in the $10 - $20 range. This is a high beta stock and not for the faint of heart. It could go to $20 or return to the markets for another capital raise.
Molycorp Earnings Preview: What To Look For [View article]
drevil,
Their trying to preserve cash. Though the quarter was favorable from a cash flow perspective, the company pushed necessary capex further into the future. They still have to fund those capital expenditures, either from future cash flows, the pending asset based revolver or another capital raise. Management is buying themselves more time.
Molycorp Earnings Surprise: 'Pain Ahead' For Shorts? [View article]
Molycorp Earnings Surprise: 'Pain Ahead' For Shorts? [View article]
I don't think added supply from MCP will depress prices further. The company's cash burn was so impressive because it slowed planned capex. The interim CEO said even if the Mountain Pass expansion is finished, it won't run at 20k capacity unless demand warrants it.
Molycorp Earnings Surprise: 'Pain Ahead' For Shorts? [View article]
With the gain from the calls, I actually turned a profit on my trades.
(i) I think the CEO was referred to as "interim" when he first took over and I haven't seen an official press release where he has taken the job permanently.
(ii) Molycorp is seeking additional funds in the form of a revolving credit facility. Secondly, no the interim CEO did not say the company was seeking additional equity. However, he didn't rule it out as a possibility if cash flows remain negative.
(iii) The company reported a loss attributable to shareholders of $47MM, its third consecutive quarterly loss. That doesn't sound like "out of the woods" to me.
Molycorp Earnings Surprise: 'Pain Ahead' For Shorts? [View article]
The shares closed above $7 because of massive short covering. The stock will move lower next week. With all of the short covering, I don't think we really know how far MCP would fall given its quarterly losses. Shorts have created a synthetic floor on the stock. Every time it falls below a certain level, it rises quickly on light volume.
Molycorp Earnings Surprise: 'Pain Ahead' For Shorts? [View article]
I'm just pointing out something that I think may be mispriced and may impact the shares or perception of the stock going forward. If you don't think it's relevant then so be it, but some investors may consider it important. Also notice how reports are surfacing about what a great quarter it was and how the company exceeded last quarter's results; actually, 4Q results included a $258MM write-down.
Molycorp Earnings Surprise: 'Pain Ahead' For Shorts? [View article]
I think 1Q 2012 does not include financial results of Neo. Neo wasn't acquired until June 2012. 1Q 2013 includes Neo whose operations are included in the Magnetic Materials segment.
Molycorp Earnings Surprise: 'Pain Ahead' For Shorts? [View article]
That's what I heard. He said directly that even if he completed the Clor-Alkali plant, the company would not run at 20k mt capacity unless demand justified it. It is all speculation at this point. We won't know what will actually happen - production or cost/kg - until the plant is completed.
Molycorp Earnings Surprise: 'Pain Ahead' For Shorts? [View article]
Just in case the company reported better than expected earnings and short sellers sent the stock higher. This scenario actually happened (over 60MM shares traded). The profit on the calls more than covered the losses on the puts.
Molycorp Earnings Surprise: 'Pain Ahead' For Shorts? [View article]
I will have to think about where to go from here. I would like to buy in at a lower price but the millions of shorts provide a floor to the stock.
Molycorp Earnings Surprise: 'Pain Ahead' For Shorts? [View article]
The market had built in a near bankruptcy scenario. When results were not as bad as anticipated, people started going off about the turnaround story and what a great job management is doing. If MCP had announced these same results last quarter, the stock would have sold off. The interim CEO even intimated the company may have to return to the capital markets again over the next few quarters.
Molycorp Earnings Surprise: 'Pain Ahead' For Shorts? [View article]
I know they stockpiled inventory and that the drop in REE prices are driving down the company's profitability. I've been saying that for weeks. As far as profitability is concerned, "real results" are all I have to go on in estimating the market value of Neo. Also, if I am obsessing needlessly over book a book item, why doesn't management just write it off since it doesn't matter?
Molycorp Earnings Surprise: 'Pain Ahead' For Shorts? [View article]
If MCP can survive the next 2-3 quarters, it could get in the $10 - $20 range. This is a high beta stock and not for the faint of heart. It could go to $20 or return to the markets for another capital raise.
Molycorp Earnings Surprise: 'Pain Ahead' For Shorts? [View article]
Molycorp Earnings Preview: What To Look For [View article]
Molycorp Earnings Preview: What To Look For [View article]
Their trying to preserve cash. Though the quarter was favorable from a cash flow perspective, the company pushed necessary capex further into the future. They still have to fund those capital expenditures, either from future cash flows, the pending asset based revolver or another capital raise. Management is buying themselves more time.