Why Molycorp's Shares Plunged Today
Aug 9th 2013 2:38PM
Updated Aug 9th 2013 2:46PM
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 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.
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The article Why Molycorp's Shares Plunged Today originally appeared on Fool.com.Fool contributor Travis Hoium has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.