Bargain hunters drive Molycorp shares 11% higher
Molycorp (NYSE: MCP) shares popped higher on Wednesday as bargain hunters stepped in after the stock hit its lowest level since its reincarnation five years ago.
By the close Molycorp some 8.5 million shares had changed hands compared to the 5.5 million daily average with the counter closing at $2.79, up 11.6% on the day.
Molycorp is a speculators' favourite and the closely watched stock regularly features among the most active on the New York stock exchange.
No fresh positive news drove the price higher on Wednesday. But rumours about a possible takeover by a Chinese firm of the Colorado-based company to get hold of the technology it acquired with its Neo Material purchase are regularly dusted off (those same rumours have driven struggling Australian peer Lynas Corp's shares off its 52-week lows too).
If anything speculation about Molycorp running out of money within a year and that it will be forced to tap markets again are only mounting.
Last month Morgan Stanley warned about cash becoming tight at the rare earth miner due to possible revenue shortfalls after a slow ramp-up in volumes and detrimental sales mix based on lower sales of neodymium and praseodymium.
Molycorp stock is still nearly 40% cheaper than before the release of another set of disappointing financials a month ago.
The company reported an 18.5% year on year decline in Q1 revenues against expectations of an uptick and despite a 10% jump in sales volume over the final quarter of last year to 3,518 tonnes.
That was due to average selling prices – falling 13% to $33.69/kg – continuing a protracted slump.
That compares to full year average selling prices for 2013 of $42.26 per kilogram from its Mountain Pass, California mine and processing plant.