Molycorp Inc (MCP): Don’t Expect That Dead Cat To Jump Much Higher

Investors might have been happy that modernization at Mountain Pass is moving apace, but the losses at Molycorp are mounting ever higher, widening from under $3.5 million in the first quarter of 2012 to more than $47 million in 2013. And the second quarter’s not going to get any better.

Last, Molycorp is still subject to a number of shareholder lawsuits and SEC investigations related to actions the company took (or didn’t take in relation to failing to appropriately publicly disclose information). Those have yet to be resolved, and while the miner has new management in place after its CEO beat feet, there’s little reason to think now is the time it will turn.

Alternatives to rare-earth elements are getting developed, and while they’ll still have an important role in electronics, automobiles, and defense systems, as more miners like Lynas enter the market we’re going to see prices decline further impacting the financial situation at Molycorp Inc (NYSE:MCP).

If you made money on its pop the other day, great! But don’t expect that dead cat to bounce much higher for you.

The article Holy Molycorp! That’s Some 31% Bounce! originally appeared on Fool.com and is written by Rich Duprey.

Fool contributor Rich Duprey and The Motley Fool have no position in any of the stocks mentioned.

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