Back in August Molycorp did a notes and common follow-on offering and MS dropped their coverage in anticipation of bookrunning the stock part of the offering. The stock was at $16.62 on Aug. 1.
It is trading at $6.91 today. If I remember correctly the original Overweight was back in March in the $20's.
From
Benzinga:
UPDATE: Morgan Stanley Downgrades Molycorp Citing Near-term Uncertainty, Removes PT
In a report published Tuesday, Morgan Stanley downgraded Molycorp Inc. (NYSE: MCP from Overweight to Equal-weight, and removed its price target on the stock.
Morgan Stanley noted, "We are moving to Equal-weight on MCP following
Friday's disclosure of a formal order of SEC
investigation pertaining to, among other things, the accuracy of the
company's public disclosures. While risk-reward in the shares remains
attractive, our downgrade is driven by near-term uncertainty. We have no
view on the eventual outcome of this investigation; it is possible that
the worst case scenario is already priced in. But given the uncertainty
surrounding this issue and the possibility that it will take some time
to resolve, we are moving to Equal-weight and removing our price target.
Our base case valuation goes to $12 from $18 previously on higher capex.
As we said in this morning's "
The Rare Earth Bubble Has Burst (MCP)":
The thing to remember about bubbles is they don't immediately re-inflate. It seems to take anywhere from a year to a generation....
