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WIKI ANALYSIS
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This company completed an initial public offering (IPO) of its stock in 2010. View articles that reference this company. Recent IPOs: Globe Specialty Metals • LogMeIn • Invesco Mortgage Capital • Medidata • Chemspec |
Molycorp (NYSE:MCP) mines rare earth elements (REE) and sells them to business which use them for specified applications. The oxides, metals, alloys, and magnets the company makes are used in hybrid vehicles, wind turbines, fiber optics, lasers, and many defense applications. Molycorp is the largest rare earth oxides (REO) producer in the Western Hemisphere and is among the largest in the world.[1]
The consumers of the rare earth elements that Molycrop produces tend to fall into 4 main industries clean energy, high technology applications, military defense, and advanced water treatment.[2]The United States currently imports the majority of its rare earth elements from China, but there has been an increasing governmental push to decrease this dependency. Based on this, Molycorp has applied for a $280M loan guarantee from the Department of Energy. While the loan is still in its approval phases, the high usage of REEs in both clean and defense technology is expected to increases the chances that Molycorp will receive the loan.[3]
According to the Industrial Minerals Company of Australia, the demand for these types of rare earth elements is expected to increase by 4%-5% each year excluding China. In addition, many countries have announced that they plan to stockpile rare earth elements to ensure that they maintain a large enough supply to actively provide defense contracts as they become necessary.[2]
The company's initial public offering occurred on the 28th of July on the New York Stock Exchange. The deal priced at $14, which was below the $15-$17 initial price range. The company offered 28.1M shares, making the total deal $394M. The lead underwriters for the deal were J P Morgan Chase (JPM) and Morgan Stanley (MS).[4]
For FY2009 with year ended 31 December 2009, the company reported total revenues of $7 million. The company began in June of 2008, so there is no annual data to compare this performance. However, the company recorded only $2.1M in revenue in the 6 months of 2008 that it operated. Despite the rising revenue figures, net income for 2009 was -$28.6M. The company will likely remain with a net loss of $7.7M for the 3 months ended in March 2010.[5]
References
- ↑ MCP S-1A 2010 "Prospectus Summary" pg1
- ↑ 2.0 2.1 MCP S-1A 2010 "Industry Overview" pg 4
- ↑ Earth2Tech "Molycorp Betting on IPO to Open Federal Purse for Rare Earth" 26 July 2010
- ↑ Renaissance Capital - IPO "Molycorp estimates IPO price of $14 per share" 29 July 2010
- ↑ MCP S-1A 2010 "Summary Consolidated Financial Data" pg 14
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