Here is a list of things to consider.
*** Warning: there is a strong short outlook for this equity.
*** It is not for the weak of heart nor for leveraged long positions. (shorts will prevail, short term)
1. MCP is the largest rare earth provider in the US
2. Go to Google Maps and review the satellite image of the California Mountain Pass mine
67750 Bailey Rd Mountain Pass, CA 92366
3. MCP is going to release new shares and "borrow-share notes" to Morgan Stanley and Goldman
4. Investment banks would not carry MCP shares into bankruptcy
5. The short thesis has been correct for the past nine months, it may continue...
6. SEC investigation is pending without media information on the direction of the outcome + or -
7. The earning report is set for Feb 18th (Friday) an indication of negative outcome
8. Rare earth prices have head-winds so this is across the entire sector
9. As a ultra long play, metal in general will be buffered against global inflation (good sign)
10. MCP's debt is over a billion (serious need of debt restructuring)
11. MCP needs stringer leadership
12. Will the US and California allow MCP to bankrupt? (with politics difficult to determine)
13. Can Molycorp be purchased by a manufacturer to control supply-chain costs? Possible.
14. Will this strengthen the stock price - Yes.
This is an interesting stock to watch. I'm no longr a holder of this equity as there is too much uncertainty.
It will certainly be an interesting show; either it will end like Enron (bad) or Walmart (amazing).