Molycorp (MCP) shares have dropped more than 10% in pre-market trading amid negative news reports from websites, including Seeking Alpha, where a contributor who is short on the stock wrote that the mining company may be worth $1.60 a share.
“Since investing in the company has been the equivalent of trying to catch a falling knife – there is no telling when Molycorp’s losses or cash outflows will abate,” the Seeking Alpha contributor wrote, saying that without a further capital raise the company will run out of cash in 2015.
Molycorp, Inc., manufactures custom engineered rare earth and rare metal products. The Company’s reportable segments include resources chemicals and oxides magnetic materials and alloys and rare metals. The stock recently traded at $2.30 and is near the bottom of the 52-week range of $2.39 – $8.06.