Why Molycorp's Shares Plunged Today

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of rare-earth miner Molycorp (NYSE: MCP  ) dropped as much as 16% today after reporting second-quarter earnings.

So what: Revenue rose 31% in the quarter to $136.9 million but net loss was $70.0 million, or $0.44 per share. Wall Street was expecting revenue of $157.6 million and a loss of just $0.23 per share versus a reported adjusted loss of $0.36.  

Now what: There's no improvement in sight for rare-earth element prices and that's the core problem for Molycorp right now. The company has flooded the market with supply and that's forced prices lower and profits have evaporated. I don't think any of the market pressures will ease and there's not a lot of hope for a profit going forward.

Interested in more info on Molycorp? Add it to your watchlist by clicking here.


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  • Report this Comment On August 09, 2013, at 4:38 PM, stu2395 wrote:

    Instead of asking "Why did Molycorp's Shares Plunged Today" you should be asking Why didn't Molycorp's Shares Plunge More Than They did Today?

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