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 element miner Molycorp
So what: The target of Molycorp's affection is AS Silmet, which owns one of just two rare earth processing facilities in Europe. Molycorp will take control of 90.023% of the company, costing approximately $89 million. Molycorp's rare earth mine in Mountain Pass, Calif., will supply feed stock for the plant and doubles Molycorp's current capacity to 6,000 metric tons.
Now what: This is a good deal for Molycorp, but the size of today's jump is a bit curious. The company Molycorp is acquiring has a total market cap around $100 million, but Molycorp's market cap is up about $540 million on the news. That's a great deal for Molycorp, but it seems a little strange to this Fool for such a big jump on a small acquisition. All in all, I see this as a good move for Molycorp, but the day's move may be a bit overdone.
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Fool contributor Travis Hoium does not have a position in any company mentioned. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings or follow his CAPS picks at TMFFlushDraw.
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