So what is your point? That we don't know the date to expect? Or that they are late? Because anyone is free to say that they might change the pattern. But you can't really say they are late, when they seem to have ALWAYS been later than the suggested March 2nd date. The rule requires Annual reports be released within 90 days of the end of the fiscal year. So they aren't late until April 1st.
Are you suggesting they are late? Or that people who see the pattern are cannot generalize with certainty?
I think there is a requirement from the SEC/NYSE about issuing a press release to schedule the release of the Annual report and conference call. They can hardly have a conference call for investors without telling people. By your reasoning, they may be having a conference call right now, and presenting the results.
At one point I was fairly certain there was a rule that said the quarterly financial results (including the annual filing) had to be scheduled and a a press release about that schedule had to be issued a week in advance. But now I am not able to find that rule to really state it with certainty. There are requirements for publicly traded companies. Rules from the stock exchanges, and rules from the SEC.
Here is a bit of NYSE gobbledy#$%$:
203.01 Annual Financial Statement Requirement
Any company with voting or non-voting common securities listed on the Exchange that is required to file with the SEC an annual report that includes audited financial statements (including on Forms 10-K, 20-F, 40-F or N-CSR) is required to simultaneously make such annual report available to shareholders of such securities on or through the company's website.
I'm not sure of the rule on a PR for a CC. But I don't think they can realistically just toss out an Annual report on a whim. They can indeed change the pattern. For a long time they were only reporting on Thursday, but now they have been using Wednesday.
There is no delay. The Annual report has always been released in mid-March.
But we ALL want to know the cash burn and the current project progress. I'm guessing Wednesday the 11th or the 18th as the report date.
But the stock is also down. If the company's market cap rose to $1 billion, stock price of $4, would a deal that bought debt at 30 cents on the dollar still look good? At that stock price, they could pay $1 on the dollar, and it would dilute less.
I understand that debt is at a big discount but so is the stock. You have to determine which is more discounted. Say they actually make progress. Report a terrible Q4-14, then a merely bad Q1-15, then a breakeven Q2. What would the market cap be? It could be anywhere in the $1 - $5 billion range. A stock price then of $4 to $20. Issuing stock at under $1, after a reverse split, and the extreme market reaction to that and then dilution ... that is not a positive plan.
I dislike that plan of reverse split and stock dilution. That just seems a slow path to failure. Obviously I would rather they succeed.
I've said before that I consider business success would create a situation where they could then build on that very easily. The barrier to entry in rare earths is high, and if they succeed in becoming either the only, or one of two non-China rare earth companies, they can use stock to acquire and build a larger conglomerate. But they have to BE that successful business.
The only problem they have to solve is how to operate Mt Pass at the targets. If they do that the debt problems are much smaller.
The thing they need to do is operate the company profitably. Raising money to fund more losses doesn't seem reasonable. They have enough cash. There is no reason to raise more.
If they do succeed at regular profits, the capital markets will open up to them. Oaktree is a lender of last resort operation. But with some positive cash results, they can get favorable refinancing for loans.
Say they refinanced $2 billion into 20 years at 5%. My spreadsheet says that is payments of $13 million per month, call it $40 million per quarter. Ultimately, if they can operate profitably, they can have a favorable corporate credit rating, and they can issue new debt to refinance the currently unfavorable debt.
It is hard to give odds on the chances of that necessary success.
I would not move towards a reverse split until necessary. If the stock price never clears the limit in the maximum time allowed ... then do a reverse split. The easiest way to get the stock price in compliance is the same one that lets them fix the debt issues: make some money.
Not to point out the obvious, but you say:
"You can not beat big money"
"Get a stock screener and find your way"
Those are two contradictory investing statements.
The next Quarterly report is the Annual report. They've released that fairly deep into March in the past. Considering they have moved to a Wednesday report day-of-week, I would guess that the Annual Report is released on Wednesday March 11th.
There is generally a one week advance notice expected for any quarterly report. I'm not sure if it is an SEC requirement for a PR with a week advance ... I thought it was the requirement, but I'm not sure ... it seems that I've seen companies not release that PR. But Wednesday March 4th is now a week from today.
Wednesday March 18th is a strong possibility also. I don't expect next week.
The Q4 results and Annual report will be delivered with the Q1 75% in the books. They can indicate the production levels, costs of production, demand (Chinese New Year always a Q1 problem), and prices they are seeing.
The Q4 results will be terrible. The production increase is welcome news, but the cost side will still be impacted by the HCl purchases. and the bottlenecks they've been fighting. If they can speak about operational improvements and can indicate that progress is finally being made, the bad results will be of lower importance.
They already received a delisting notification. They now have 6 months to return to listing eligibility. I don't know the situation on extensions currently. In the midst of the recession companies could appeal for another 12 months.
It appears that MCP will wait and see if the stock meets the eligibility price without any action on the part of the company. I believe that if they get to 5+ months and there is clearly not a market price happening, they can appeal, with a plan to reverse split at that time. So there should not be any news until June-ish.
They will certainly face questions at the CC. And the answer looks like it will be that they expect the stock price to rise again. I think that is reasonable.
Options have a natural effect in the market. But I don't see enough option volume to matter all that much. I just checked and there are about 8500 options contracts at strike price $1 and about 1800 at the $0.50 strike. If the price goes over $1, the $1 strike options represent 850,000 shares that have a profit. Say the price runs to $1.10. That is a measly $85,000 payout over the close at $1.00. The "Lords of the Universe"have bigger fish to fry.
I would look at the Yahoo historical prices and give an estimate of the options arbitrage volume vs the recent average volume but that page is broken at this moment.
For laughs I encourage you to look at the historical prices link on Yahoo. Today's price is $17,100.00 I'm willing to sell half my stock at that price. I mean I would hold the rest for a better profit, but $17,100 per share is reasonable.
And the next two closes:
The 30-day moving average rises to $0.5977. We are currently on track for a 30-day moving average over $1 by mid-March.
I ran into Yahoo's size limit ...
If you added those numbers up, you get a barely profitable business.
$270 million Mt Pass revenues
$360 million costs
$64 million magnetics profit
$30 million chemicals and oxides profits
$0 million rare metals
$4 million net profit.
Now the interest eventually gets lowered as they re-fi. If they drop the interest they add the interest payments to the bottom line.
Even at that minimal profit, they would have dominance in the RE industry sector. My own speculation is that as the only company with viable record and viable finances, they would actively pursue acquisitions and spinoffs at that point. And those would let them add in the more valuable RE amounts, and eliminate the worse segments.
It is all predicated on the proposition that they can hit the operational targets for Mt Pass. That is essential for survival. After that, you have to get sloppy with the RE price and demand predictions. I would say that the SG&A seems exorbitant, and I really haven't broken down the amount of that in the form of stock options. If there is $25 million of tat in the form of options to management each year, then that has an effect on cash flow.
This was all back-of-the-envelope and was calculated as I typed. There could be glaring errors. The bottom line in long term value is the bottom line. In a development company, value is speculative based on expectations.
A rational better would calculate the outcomes and assign odds. I think the long term value of a surviving MC would be as a company with a PE of 10-ish to 15-ish. There are a lot of things that matter in the calculation of any future profits though and that makes it difficult.
As a simple Mt Pass calculation, say they hit the operational target and say they produce 20,000 mt at $7000 per ton, each year. Baseline costs would be $140 million. Plus $100 million SG&A. Plus interest, call it $100 million. Say $350 million.
Revenues from Mt Pass could be all over though:
Neodymium, 2400 mt. @$50, $120 million. @$75, $180 million, @$100, $240 million
Praseodymium, 800 mt. @$50, $40 million. @$75, $60 million, @$100, $80 million, @$125, $100 million
Lanthanum 6600 mt. @$3, $20 million, @$4, $26 million, #$%$ $33 million, @$6, $40 million
Cerium 9800 mt. @$0, $0 million, @$1, $10 million, @$2, $20 million, @$3, $30 million
Take the $75, $75, $3, $1 prices: $180 + $60 + $20 + $10 = $270 million
Say the Magnetics and Alloys segment sells 8000 mt (that is a very reasonable expansion from the current levels).
@$30, $240 million. @$40, $320 million, @$50, $400 million, @$60, $480 million
Simply using a profit margin of 20% on that processing, and say a price of $40 per kg, forms an estimate of $64 million profits from that segment.
Chemicals and Oxides had about $220 million of revenues in 2013. The 2014 Annual report will be out soon and we can look at the 2014 numbers. Eventually that should generate some profit margin (or else sell it off). Say that long term it is $300 million with a 10% margin ... another $30 million profits. If SorbX sales ever grow, I think they show up here, and if you have optimism around that, then this number could be large estimates.
Rare metals is small and break even. I keep waiting for better results here. If they can't deliver profits from this segment then I would advocate selling the Gallium recycling operations off (pay down some debt)
If it was at 28 cents for a reason, supply that reason. If you have a firm model for that price then you can apply that valuation model to the PR from Molycorp with the updates on production. Then you can determine if the stock price increase makes sense to you.
On the other hand, if you don't have a reason why they stock was at $0.28, but only say there was a reason, then you can't really make any conclusion about the reasons for the higher prices.
So ... you say it was at 28 cents for a reason. What was that reason?
They made an announcement on February 2nd. The stock close on January 30th was $0.33. I think we can attribute that as the only news that most corresponds to the run.
And to be clear, they did announce the Q4 production amounts, and added some clarification about the hydrochloric acid reagent costs, and the overall costs. Q4 will still be terrible, but it had the potential to be cataclysmically awful. The announcement puts the range of expected results back into expecting merely terrible.
And there is a chance that they are on track towards the business plan that makes sense. Probably not, but you have to at least allow for that chance now. Was the PR concrete evidence of improvement? Surely an increase in production, and a decrease in critical costs counts as concrete evidence?
I was more astounded by the 2 month drop, say from November 20th's $1.20 to January 23rd's $0.28. That was irrational.
I would advise you to look at the company PR for February 2nd before saying there is not any concrete evidence. And to look at the drop to $0.28, and the news that preceded that. Determine the value of the company, not the relative magnitude of recent stock price swings. It isn't over-priced because the price is higher than the ALL-TIME lows.
The last 2 closes:
These displace #29 and #30 on the list in my first post. The 30-day moving average rises to $0.5977
"Under the NYSE's rules, the Company has a period of six months from the date of the NYSE notice to bring its 30-day average share price back above $1.00."
The 30-day moving average may be about to turn up. Here are the closing prices for the last 30 days. As you can see the price dove down about 26 days ago. Today's (11-Feb-15) close was $0.83. The 30-day moving average as of yesterday's close was $0.596. Taking away the 29-Dec-15 $0.85 close and adding the $0.83 close of today moves the 30 day average to $0.5933. Hopefully the price keeps climbing, and starts to add days over $1, and the 30 day average price climbs up over that also.
The prices immediately after the letter notification of a de-listing price fell precipitously, hitting the low close 14 market days later.
1 10-Feb-15 0.77
2 9-Feb-15 0.73
3 6-Feb-15 0.69
4 5-Feb-15 0.72
5 4-Feb-15 0.72
6 3-Feb-15 0.8
7 2-Feb-15 0.48
8 30-Jan-15 0.33
9 29-Jan-15 0.39
10 28-Jan-15 0.41
11 27-Jan-15 0.36
12 26-Jan-15 0.35
13 23-Jan-15 0.28
14 22-Jan-15 0.38
15 21-Jan-15 0.46
16 20-Jan-15 0.46
17 16-Jan-15 0.51
18 15-Jan-15 0.5
19 14-Jan-15 0.54
20 13-Jan-15 0.56
21 12-Jan-15 0.6
22 9-Jan-15 0.6
23 8-Jan-15 0.65
24 7-Jan-15 0.69
25 6-Jan-15 0.69
26 5-Jan-15 0.76
27 2-Jan-15 0.86
28 31-Dec-14 0.88
29 30-Dec-14 0.86
30 29-Dec-14 0.85
That is the part of MCP business that really makes it all work. Neodymium-based magnets are pretty amazingly strong. And that magnetic superiority has so many applications.
You know if you have to pay bribes all February and March, you might as well be a legitimate business. Nah.
The one that pays the lowest bribe and is least connected will get arrested. The rest will get forgotten. They do love to announce investigations into RE illegal activities though. Local party officers just don't stay bought for as long as they used to. After they take a few bribes, make a dramatic arrest and move to the capital, the next crew wants a whole 'nuther set of bribes.
But 8 ministries investigating ... that is going to be expensive.
The only Panasonic battery investment I am familiar with is with Tesla. Pretty much any new battery plants should be lithium ion rechargeable or lithium ion disposable batteries. That is the current best chemistry set. And that chemistry set has no rare earths in it.
The previous best rechargeable battery, and still a very important battery in a lot of applications is the nickle-metal hydride chemistry, which uses rare earths in the "metal hydride" (primarily lanthanum, sometimes lanthanum-cerium mix).
I'm a huge fan of the compact size and power densities of the lithium ion batteries. I would think that there is not only going to be decreasing demand for rare earths from battery use.
There may be a need for a "couple tons" of RE in the Tesla battery plant. Robots with RE magnets, etc. But not a need for a continuous supply as a chemical in the electrolyte.