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Molycorp, Inc Common Stock Message Board

  • linsider22 linsider22 Jan 16, 2013 7:40 AM Flag

    mcp earning going to blow out estimates!!!!!!!2/7 , mcp should see $11 to $13 before earnings !! rumors are flying around the office

    good look ,better be long !!!!!!!!!shorts this is your warning

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    • Not a chance. They will report lower revenues than Q3 and no change in costs ... if anything higher costs from start up testing operations.

      MCP share price might be higher, but that is because there is a fear of an offering prior to a bad earnings report. But it is a small window and as that window shrinks, the chances of another secondary shrink.

      The critical thing is that MCP has acknowledged that the preservation of capital and the reduction in operational costs are the highest priorities. Presumably they will present the plan for 2013. Since we all can do the math of determining the quarterly estimates with the cost side projections, we will know the level of risk for another offering.

      Since that info is a deduction from the report and CC, the time for an offering would be now, and every day that goes by reduces the probability of any offering at all.

      This is a very low level analysis. There is nothing to prevent a terrible report coupled to/followed by a secondary share offering. It has been done before. The company has sort of announced a change in strategy and issues with the old strategy. That info was an interview release rather than a formal release, and the quarterly report/annual report is the formal, official, audited state of the business.

      I still think that selling rare earths will be a very lucrative business. And I think MCP is wildly undervalued as an entrant into that market. Even with the financial burdens of the costly start up, I think it is going to do well in the future.

      But not last quarter ... don't be crazy.

      • 4 Replies to votingmachine
      • Look, they already lowered guidance. So it's an almost can't lose proposition for this quarter. If the earnings come in as they warned, the news is already priced in. And if it's slightly better, we'll see a nice pop. And if things have really improved more than they anticipated, look out!

      • My take was the simplest interpretation of CK's comments: He announced Phase 1 would not be producing at a rate of 19,050 mt/year on 1/1/13, and Phase 2 would not begin producing 20,000 mt/year on 7/1/13; therefore, there'd be a loss of revenue vs. projections based on project milestones provided by prior management. I don't believe he is saying revenue would decline relative to Q3; along with Phase 1, which is progressing towards greater than Phase 1 production, MCP has numerous other production facilities. In fact, CK could be thinking that if sales are twentysomething thousand mt/year in 2013, and MCP needs to conserve capital, MCP's simply continues to us original facilities along with new Phase 1 facilities. They would not get full cost savings for production, but it could be the differnce between raising capital or not. And the decision to not throw that extra production at the world until it is needed seems so screamingly obvious, I wonder how it was not pushed on Smith sooner.

      • A few quick comments -- Costs from Q3 should be down a fair bit, if you recall Moly took a number of 1 time hits based on the NEO acquicistion from Q3, these should all be gone.

        In Q3, Project Phoenix was already shipping 2700 tons of REE's and the company overall was shipping 4391 tons. There is no reason we could not see some increase in sales dollars even if the price of raw REE's went down in Q4. The $11 and $13 numbers are a bit of a pipe dream by the orignal poster, however I would still like to see some improvements on costs and sales volume.

      • The tragic thing is that the market price of MCP went down 20% ... every bit the dramatic reaction that a secondary share price offering would force. The information is still just bits of an interview, nothing solid and the market reacted as though an offering was announced. It is still quite possible that MCP has a decent sized cash reserve (suspending phase 2 construction helps) and has plan that lets it get to lower cash costs on a fast track.

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