Bloomberg - MCP takeover target with MASSIVE insider buying in past 4 months
Has everyone forgotten all the insider buying of MCP since August 2012? In November 2012: MOLIBDENOS Y METALES S.A., MCP's chief legal counsel, and two other officers purchased large amounts of MCP. In August, millions of more shares were purchased. Almost all were purchased at prices higher than they are today, but all below the estimated $11.60 book value.
Keep the short attack and news in perspective. It is mixed to good news in that it counter's the shorts argument that MCP needed to dilute shares to finish Phase 2 of Operation Phoenix. MCP won't need to now and will instead wait for REE prices to increase before finishing Phase 2. Shorts should be happy, but instead the drama queens argue the price should drop below their earlier targets based on now faulty logic of a dilution.
Shorts will short themselves because they make MCP a takeover target since it is well below the $11.60 book value. Since companies generally sell at a premium of 1.5 to 2x inflated (over book) share price. Don't be surprised if some major investors attempt a buy out for $15-$20 per share.
Why? MCP already has contracts to sell approximately TWICE the minerals sold in 2012. What other company can say that???
The economy is heating up again, thus REE demand and price will increase.
China is decreasing production to help stabilize prices and prices are stabilizing. (Thus MCP's news will be old, overly bearing news in coming months.
MCP's mining costs are dropping.
MCP is vertically structured with mining roughly half the market value.
The fact that REE prices have fallen is well known and a lowered estimated revenue can be expected in the short run. MCP acknowledged this fact since their prior estimates were probably based on REE prices higher than they are.
If MCP is a takeover target at $10 (per Bloomberg within the last week), it is a better target now. Price will go up again as the economy heats up and MCP proves it is selling 4x what it sold in 2012 (due to Phase 1). I expect we will see MCP at $15 in coming months and much higher when Phase 2 is on line in the second half of 2013.
I really appreciate your comments briantrader2. The discussion always seems to be is the glass half empty or half full. This is the nature of the market. There are the shorts who are looking for a quick buck and don't mind seeing companies go down the rabbit hole. Investors like me beieve in the logic of the story - RREs are needed by our country and MCP is positioned to deliver these essential products. I would hope everyone here would admit that if our economy were growning at 3 to 4 percent annually then MCP would likely be a high flyer because demand would rise and so would prices for the products produced by Molycorp.
Furthermore, I am pleased the new CEO of Molycorp is unafriad to give the good with the bad in his press release today. I'm also glad he has given a picture that has diminished expectations about the immediate and medium length future. Growing a company is usually a painful process, but in a very slow growth economy, companies must focus on the longterm success of the company.
As a business owner myself, I can well appreciate what Molycorp is facing. America needs a home-grown successful REE company - it really does.
brokerage firms ARE NOT YOUR FRIENDS. they tell you to buy, and sell into it. why do you think that brokerage firms watch a stock fall from $80 to $30 and THEN they issue a sell at $30? they know that you are psychologically beat, and they buy up your losses. this is how they make money.
#$%$ is wrong with you?
You said: " I expect we will see MCP at $15 in coming months and much higher when Phase 2 is on line in the second half of 2013."
Did you flat out IGNORE the CEO today when he said they will likely not even open Phase 2 at all? Demand is so LOW right now, there's no need for it. Plus, Phase 1 isn't fully operational until MID 2013!! LOL