Update: "After Thrashing by JPM, Morgan Stanley Says Nice Things About Molycorp (MCP)".
Following up on the post immediately below, "'Molycorp Slammed As a Major Bull Turns Bearish" (MCP)".
From the AP via Yahoo:
A sharp drop in rare-earth mineral prices is making investors much more cautious about miner Molycorp Inc., sending its stock down 15 percent Tuesday.See also:
THE SPARK: J.P. Morgan analyst Michael Gambardella downgraded the stock to "Neutral" from "Overweight" and cut its price target on the belief that a run-up in prices for rare-earth minerals was driven by speculation.
THE BACKGROUND: Molycorp, based in Greenwood Village, Colo., produces rare-earth minerals that have tumbled in price recently. Since July, celium prices have fallen 48 percent, lanthanum 36 percent and neodymium 22 percent, Gambardella wrote.
Rare-earth minerals have a variety of uses, especially in electronics.
THE ANALYSIS: "We believe a large part of this year's run up and recent drop was caused by a host of players in China speculating on rare earth oxides," Gambardella said. Combined with an expected drop in world demand for rare earths, Gambardella said he's "taking a more cautious stance" on Molycorp....MORE
Monday's "Predictions: Rare Earth Demand 2015-2020 (MCP; REE; AVL)".
Our last post on trading MCP was Aug. 12's "And That's a Wrap: "Molycorp shares soar on earnings and Hitachi deal" (MCP)". The calls were good for a triple, the third time this year the stock moved enough, up or down, to take a little off the boys in Chicago.