Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
Believe it, the shorts are in control. They never went away if you check the history since the fake article was published.
They won, doesn't seem like it, Doral has even told the press they are prepared to settle using the pre-trial settlement framework. PR on the other hand says they are not going to pay Doral a dime. Whoever is making these decisions is acting like a obstinate child. They are taking a lot of heat on that from in the press.
Got back in following the last run to 9 this should be the best ride of the year
Good luck guys it will be an interesting morning!
Evidentiary hearing ordered for lawsuit between Doral and Finance
Seems the treasury department isn't budging and they will now have to prove the debt is none existent or that Doral has committed some sort of fraud. This will be hard to prove considering that they've ratified the tax documents several times.
You can also listen in to a conference call tomorrow.
DATE: Tuesday, August 26, 2014
TIME: 11:00 a.m. EDT
SPEAKER: Dr. Robert Shapiro, Co-founder of Sonecon; former U.S. Undersecretary of Commerce for Economic Affairs
DIAL-IN: 866-952-1908; Conference ID: DORAL
RSVP: Ted Greener (tgreener@dcigroup.com; 202-572-6209)
Evidentiary hearing ordered for lawsuit between Doral and Finance
By: NotiCel
Posted: 25/08/2014 5:42 pm
Negotiations between the Doral bank and the Treasury Department did not culminate Monday as expected. According to the Court notified the parties shall complete the process of discovery of evidence through 5 September to then hold evidentiary hearing.
The conference prior to trial will be on September 10. Counsel for the parties shall submit a preliminary report with any Exhibits five working days before the conference in advance as the top judge ordered Perez Laureana.
The lawsuit with the financial institution arose after Hacienda declared void an agreement entered into in 2012 with the bank through which they must pay almost $ 230 million for taxes allegedly overpaid.
Subsequently, the Treasury Department determined that the agreement was invalid because Doral had not exceeded tax payments.
http://www.noticel.com/noticia/165032/ordenan-vista-evidenciaria-para-pleito-entre-doral-y-hacienda-documentos.html
http://noticel.com/uploads/gallery/documents/da8f1dc92937052f7ba4b97bb8394470.pdf
Here is the latest from an 8K this morning:
As previously disclosed, Doral Financial Corporation (the "Company") and certain of its subsidiaries (collectively with the Company, "Doral") have filed a lawsuit (the "Lawsuit") against the Commonwealth of Puerto Rico (the "Commonwealth"), the Puerto Rico Department of the Treasury (the "Treasury Department") and the Secretary of the Treasury Department, Hon. Melba Acosta Febo, in her official capacity, as defendants, in the Court of First Instance of Puerto Rico (the "Court of First Instance") seeking to enforce the Closing Agreement dated March 26, 2012 between Doral and the Treasury Department (the "2012 Closing Agreement") and to collect the $229 million owed to Doral under the 2012 Closing Agreement.
There have been a number of decisions and developments relating to this case, as previously described by the Company in several Current Reports on Form 8-K filed with the Securities and Exchange Commission (the "SEC"). Most recently, Doral and the Treasury Department entered into court-supervised negotiations to settle all claims by Doral with regards to the subject matter of the Lawsuit and initially had ten (10) business days from August 8, 2014 to finalize the terms of a settlement agreement. On August 22, 2014, Doral and the Treasury Department agreed to extend the negotiations until Monday, August 25, 2014 when the parties are to appear before the Court of First Instance. Although there is a proposed framework for settlement, the final settlement is still being negotiated by the parties and remains subject to approval by the Court of First Instance.
Ok guys here are some quick excerpts from the news over the last several days that shed light on the Doral Financial Corp (DRL) settlement negotiations. emphasis mine, interpretation mine
Thursday:
From the press releases we can see an agreement is drafted by Thursday, August 21, 2014. The Government of Puerto Rico introduce Foley & Lardner to help fit the final draft agreement and tax vouchers into existing local tax law.
Doral see's a conflict of interest because Foley & Lardner were their previous council. A motion is filed seeking Judge Laureana Pérez Pérez's advice and the press interprets this as a negotiation breakdown.
Friday Morning:
A decision is made by the Judge and Foley & Lardner are authorized to advise the government strictly within the scope of tax law and help interpret the tax vouchers into existing law. Only they are not permitted into the negotiation room but can advise from a neighboring room.
We can see from Thursday's press release Friday Morning was the actual deadline but no worries because the final draft agreement had already been authored Thursday.
What lays ahead from Friday morning on is the ratification of the final draft agreement into law. This was expected at the end of the 10 day settlement talks. We don't know what details are included but an agreement has been forged. The task of weaving it into existing tax law is now the job of Judge Laureana Pérez Pérez. The timetable for that task can not be forced and will happen when it will happen. What happened in court from Friday morning until business days end was the Judges day of questions and answers to draft what ever laws and legislation are necessary to make the final draft agreement binding and satisfy all parties.
I fully expect Judge Pérez Pérez has been working on this throughout the weekend.
Disclosure: I was not at the court but having watched many such negotiations in the past and reading what came across the wire I see nothing unusual here. A statement will be issued only when Judge Laureana Pérez Pérez finalizes her work. To announce anything sooner would be political suicide and likely end her career. This is as middle of the road as I can interpret this information, I'm open to other ideas on the between the lines guess work. These things however follow an expected format but that's not to say something totally unexpected can't muck up the machine.
So there you have it, news can come as soon as Monday Morning or it may take days to write this settlement into law. News will first appear at the clerks office in the Civil Court of First Instance, San Juan Superior Division when it becomes filed into public record.
=================================================================================================
Here is an abbreviated list of the press releases. Everything is readily searchable on google but the harder to find stuff has been given links and translated from Spanish to English:
August 21, 2014
7:31 pm Update
Doral abandoned negotiations with Treasury
http://www.elnuevodia.com/doralabandonalasnegociacionesconhacienda-1838958.html
. . . Judge Laureana Pérez Pérez, had given Doral and Finance 10 working days to reach an agreement. This period culminated Friday morning, . . .
. . . the Government of Puerto Rico as the Foley & Lardner own LPP "believe strongly" that the alleged conflict of interest "is nonexistent."
. . . today was scheduled a meeting between the parties to discuss the final draft agreement. "That document, which was ready to be delivered and discussed as part of the negotiation . . .
But sources close to the negotiations indicate that Doral intended that these "vouchers", classified as securities were issued by the Commonwealth. "The commonwealth can not give it the name of Doral," said another source, implying that to issue debt, the government would first have to create legislation. The source also said the government could do what I do is to recognize those "vouchers" for a tax deduction, as long as they are sold as an asset of Doral and not the state.
The issue of "vouchers" was what led to the Hacienda resort to counseling Foley.
federal tax and securities laws, "said the government.
11:18a
*Doral Financial Spikes to High; Settlement Announcement Expected Today (Benzinga)
11:20a
New Statement from Doral Legal Counsel Matthew D. McGill Regarding Doral Negotiations with Hacienda (PR NewsWire)
"Doral has not left the negotiations. The Treasury Department attempted on Thursday to introduce into the negotiations so-called "business points" conceived by its new outside counsel, Foley & Lardner, that were contrary to the provisions of the agreement reached and sworn to by the parties in front of Judge Perez-Perez of the Court of the First Instance. Foley & Lardner recently represented Doral in a related matter and that raises a conflict of interest.
August 22, 2014
Finance and Doral continues to the negotiating table
http://www.elnuevodia.com/haciendaydoralsigueenlamesadenegociacion-1839386.html
On the one hand, the lawyer Matthew D. McGill of the firm Gibson, Dunn and Crutcher, representing Doral, said "Doral has not stopped the negotiations." It further argues that the judge Laureana Pérez Pérez agreed that negotiations will continue Friday under her supervision, but for now without the law firm Foley & Lardner.
. . . Treasury said it needs the expertise of a firm like Foley & Lardner, because as part of the deal is being discussed the possible viability of certain complex tax instruments such as coupons or vouchers in the amount of $ 700 million.
"The trial judge determined that the negotiations will continue today and only trial lawyers of Finance and Doral will be present. They will not be present at meetings of the Treasury legal advisors or Doral, other than the litigants. But (consultants) will be in rooms nearby advising clients. Foley will continue to advise the Treasury and the Government Development Bank on issues related to federal taxation and securities laws.
2:49p
Puerto Rico Department of Justice and Treasury Issue Joint Statement (PR NewsWire)
"The Puerto Rico Department of Treasury and the Department of Justice continue to work in good faith to reach a settlement with Doral that is in the best interests of the Commonwealth, while adhering to all applicable laws and regulations in agreement with the Court's instructions.
"The Judge of First Instance ruled that negotiations will continue today, and that only litigation attorneys for Treasury and Doral will be present. No legal advisors to Treasury or Doral, other than litigation attorneys, will be present in the meeting, but will be in nearby rooms advising their clients. Foley will continue to provide Treasury and GDB with advice on matters related to federal taxation and securities laws."
2:51p
Puerto Rico: Continues to Work In Good Faith With Doral Financial (Dow Jones)
2:52p
Puerto Rico: Treasury Advisors Vetted Through Robust Conflict Check Procedure (Dow Jones)
2:54p
*Puerto Rico Dept of Justice, Treasury Issue Joint Statement, Say Foley Will Continue to Advise on Doral, Still Working on Settlement (Benzinga)
Could go higher but I set A stop limit at 9 so I'm out. At the time I thought I'd be lucky to hit that number on the settlement, guess I underestimated. Be careful this one it's thinly traded and will move on a dime. "Bulls make money, bears make money, pigs get slaughtered"
Good luck guys
When will the Human Clinical trial data on niagen be released?
Looks rather quiet around here, noticed a $7.70 after hours.
On August 8, 2014 Doral Financial and the Puerto Rico Treasury entered into court-supervised negotiations and agreed to suspend hearings for 10 days as they look to settle Doral's lawsuit.
This looks like the makings of a stock inflection point this week. Either they settle or we are back to court and the PR Government will have the burden of proof ordered by the court to show fraud, malfeasance and misrepresentation on the part of Doral. I think with the bad publicity over the governments solvency thats hitting the investment market on this small island a decision will be forthcoming.
Being that the debt has been acknowledged by successive administrations over the last eight years this burden of proof will be a tall order.
Here is the meat of the event upon us: " . . . The Court of First Instance also ruled that the Commonwealth will have the burden of establishing any alleged misrepresentation of a material fact by Doral with clear and convincing proof.
Doral and the Treasury Department have entered into court-supervised negotiations to settle all claims by Doral with regards to the subject matter of the Lawsuit and, in connection therewith, have agreed to suspend the Hearings as of August 8, 2014. The parties have ten (10) business days from August 8, 2014 to finalize the terms of a settlement agreement. Although there is a proposed framework for settlement the final settlement is still being negotiated by the parties and remains subject to approval by the Court of First Instance." URL link
"(10) business days from August 8, 2014" So this Thursday or Friday a decision is forthcoming depending on if you include August 8, 2014 . . . Monday the 25th we have news at the latest, likely before the bell.
If Doral Financial is awarded the full $229 million and with only a market cap of $48.7 million, will shares reach back to a high of $24.74 once again? Talk about a catalyst on a beaten down stock.
I love court decisions like these, Good luck guys
Don't see that scenario playing out.
Plenty of cash through Q1 next year. I do see them returning to the equity market for another secondary sometime in the interim. As far as delisting I've heard rumors of a Reverse Stock Split but it isn't even a consideration unless it falls below a dollar. At any rate that scenario would be a long ways off If they fell below a dollar. Within 10-days of hitting a dollar I'd expect they'd file a plan and then the NYSE would monitor them going forward and see that they are following it but in any case it's a long way off if at all.
I know how excited people can get when they think they've nailed the direction but with the options open to Molycorp that scenario isn't playing out anytime soon if at all.
If they do a Reverse Stock Split your short position will not be affected however the availability of shares for new positions could be unless naked positions are aloud to persist. The current short interest is 70,614,271 or 41.83% Percent of Float.
China’s Rare Earth Toxic Time Bomb to Spur $12 Billion of Mines
http://www.bloomberg.com/news/2014-06-03/china-s-rare-earth-toxic-time-bomb-to-spur-12-billion-of-mines.html
Its strange how everyone can see the industry turnaround coming but yet keep the downward momentum alive on Molycorp (MCP)
By David Stringer Jun 3, 2014 2:00 PM ET
Source: Lynas Corp via Bloomberg
Rotary kilns are seen at Lynas Corp.'s Advanced Materials Plant in Kuantan, Malaysia.... Read More
The toxic time bomb set by China’s rare earths mining boom is set to boost the prospects for some of the $12 billion of projects being developed outside the world’s biggest supplier.
As part of its pollution clean-up, China, which controls 90 percent of the global market, is studying the introduction of new taxes and regulations for rare earths in the June half that are forecast to drive prices higher.
The measures will add to pressures loosening China’s stranglehold on the production of rare earths, 17 chemically similar elements used in products from Apple Inc. (AAPL)’s iPods to Toyota Motor Corp. (7203) hybrid-electric cars and Tomahawk cruise missiles made by Raytheon Co. (RTN)
“Higher prices may spur the development of overseas rare earths’ mining projects,” said Chen Huan, a rare earth analyst with Beijing Antaike Information Development Co., a research unit of the state-backed China Nonferrous Metals Industry Association, who forecasts prices may rise more than 20 percent because of the flagged new rules.
The proposed changes come after the World Trade Organization ruled in March that the Asian nation already had violated global trade rules by imposing export restrictions such as quotas and duties on rare earths. Global stocks of rare earths were depleted after China, which consumes about 70 percent of global supplies, cut exports from 2010.
Illegal Production
“They’re clamping down on illegal production, have environmental concerns and there are countries which require rare earths who don’t particularly want to be beholden to China,” said Kevin Schultz, deputy chairman of Northern Minerals Ltd. (NTU), developing the Browns Range project in Australia. “There’s an opportunity.”
The new measures include a value tax on producers, according to a May 21 article in China Daily, the country’s official English-language newspaper. Environmental compliance certificates may be required for exports, the report said.
Chen Zhanheng, a deputy general secretary at the Association of China Rare Earth Industry, said he wasn’t aware of the reported new taxes. China’s National Development and Reform Commission, its top panning agency, hadn’t replied to questions faxed by Bloomberg.
Customers are now returning to the market as stockpiles become depleted, meaning prices will advance, said Toronto-based analyst Luisa Moreno at broker Euro Pacific Canada Inc. Neodymium oxide, used to create magnets contained in wind turbines to headphones, rose 26 percent in the year to May 29, according to Shanghai Steelhome Information prices.
Unregulated Mines
At least 18 companies are seeking to begin production outside China by the end of the decade with combined development costs of about $12 billion, according to Bloomberg calculations based on Euro Pacific figures.
Shutting down unregulated mines was a major aim of China’s campaign that began four years ago to constrain rare earth production. It can create waste gas, including deadly fluorine, and wastewater laced with cancer-causing heavy metals such as cadmium. The industry’s problems are part of a larger green crusade in China, which in April saw the passing of the biggest changes to its environmental protection laws in 25 years.
To be sure, the first movers outside China have struggled with both Lynas Corp. (LYC), which has invested about A$1 billion ($930 million) on a rare earths processing plant in Malaysia, and U.S-based Molycorp Inc. (MCP), with a mine in the Mojave Desert, plagued by weak prices and delays in achieving output targets. A rise in Chinese exports also would harm prospects for planned projects.
Acid Leaching
Efforts to halt production using crude acid leaching in southern China, which can damage agricultural land, mean the nation will probably cede its dominance in the supply of heavy rare earths, said Dudley Kingsnorth, executive director at Industrial Minerals Company of Australia Pty.
Securing supplies of two of these minerals, yttrium, used in laser targeting and weapons, and dysprosium, used in magnets for Tomahawk cruise missiles and Predator drones, was flagged as a priority by the U.S. Department of Defense in an October report to Congress.
UCore Rare Metals Inc. (UCU), Namibia Rare Earths Inc. (NRE) and Hastings Rare Metals Ltd. (HAS) are among those advancing projects outside China with high concentrations of heavy rare earths.
As well as seeking to reduce environmental damage, China’s strategy also aims to husband supplies for domestic electronic industries. Costs are rising for Chinese producers as they adopt new standards and are now equal to those paid out by Lynas, the Sydney-based company said in a May 16 filing.
“The Chinese don’t want to see prices tank as they are going to see the greatest increases in the cost structure,” said John Mair, executive director of Greenland Minerals and Energy Ltd., seeking to produce rare earths, zinc and uranium in Greenland. “We are going to see a diversification of mines globally.”
To contact the reporter on this story: David Stringer in Melbourne at dstringer3@bloomberg.net
To contact the editors responsible for this story: Jason Rogers at jrogers73@bloomberg.net Keith Gosman, Madelene Pearson
RareEarths
I thought you sold and were on the sidelines with me.
"Mines-to-magnets in the US." Yes I'm still a believer but for right now I think I'll just day trade this for a while and sleep better at night.
Re: OT OUTFOX GOLDMAN / ECONOMIC ESPIONAGE
Watched as well for several years. Missed the big run-up, felt I had a bottom nailed but there is too much miss-information surrounding this one. I'm going to let MCP find a new bottom after they return to the equity markets for another shot in the arm. In the mean time I'll just play the daily swings until an over riding direction is established.
"Economic espionage:" cant focus on the things we cant see. The truth is every corporate entity wants the edge over their competitor. China was the under dog and what they cant innovate they take, as so many corporations have done in the past. As long as those products stay inside their own markets within their boarders its hard to see the theft. It's only when those processes or technologies emerge and compete against the originator do we come to grips with the job or economic loss. Often though share holders are never made aware of the loss and the theft is never made public.
On this topic the US has lost much world credibility with it's spying campaign. I've never seen it proven that foreign corporate trades secrets were used to benefit US companies but the machinery to gain those secrets is certainly in place. The fact that the Chinese military was caught spying on US corporations will soon evaporate before the mudslinging dies down but US credibility will never be the same.
What was discovered is that employees unknowingly unlocked their own corporate communications and networks to the Chinese military by opening simple attachments. Who is to blame, who should stand trial here? I cant say the Chinese military is blameless but I believe every corporate IT department should tech its employees common sense and there should be ramifications and firings to what amounts to reckless internet behavior.
We all know human behavior and even if you tell someone "NOT" to do something curiosity will still overwhelm them. Its amazing the trojan horse has worked as long as it has.
2014 MOLYCORP, INC. Annual Meeting of Stockholders
MEETING DATE: June 25, 2014
For Holders as of: May 1, 2014
"Authorization to do something doesn't mean they will." I think it's going to happen its just a question of when? If that is the general scope of the meeting I don't know what to say guys. The fund raising may come sooner than we thought.
Beijing may raise rare earth tax after WTO tariff ruling
No translation required.
http://www.wantchinatimes.com/news-subclass-cnt.aspx?cid=1201&MainCatID=12&id=20140521000105
Beijing may raise rare earth tax after WTO tariff ruling
Staff Reporter 2014-05-21 13:06 (GMT+8)
Rare earth in Xinfeng, Jiangxi province. (File photo/Xinhua)
Beijing is considering the possibility of raising taxes on rare earth resources again to strengthen regulation on the industry in the wake of losing a World Trade Organization suit which means it will have to remove export tariffs on some rare earth products, according to the Beijing-based Economic Information Daily.
The hikes are expected to be unveiled during the second half of the year, an authoritative source told the daily.
Rare earth tax hikes are considered a major tool for regulating the rare earth industry, the source said, adding that the tax hike would help raise market prices from the root and factor in the scarcity of rare earth materials and the environmental cost of their excavation.
Changing the balance between supply and demand through price hikes will also effectively cut trafficking and discourage other countries from stockpiling, as well as mitigating the negative effects on rare earth management due to the loss of the WTO suit.
To avoid rare earth being sold cheaply, Beijing has adopted several policies in the past. In 2007, the government began implementing rare earth production planning, and gradually cut export quotas annually to restrict exports.
China also raised export tariffs on individual rare earth products starting in 2011. To better protect the resources, it also decided to adjust rare earth resource taxes sharply upwards in April that year.
Due to the extended global economic slump and China's diminished demand for rare earth materials, the price of the minerals has dropped sharply again. This has eased pressure on foreign countries, which want to inaugurate new exploration sites.
A report stated that China will continue to maintain its dominant status in the area of heavy rare earth until 2020. Currently, around 90% of the world's rare earth supplies still come from China and "overseas demand for China's rare earth could make a comeback," especially after the scrapping of export tariffs, an industry source said.
The source also cited data which suggested that China's rare earth reserves amount to only 27 million tonnes, accounting for 30% of the global reserves — the figure was previously pegged at 70%.
Judging from current production rates, China's medium and heavy rare earth reserves will only last for 15 to 20 years, after which the country might have to rely on imports for its own needs.
Rare earths are a group of rare metallic elements essential for the manufacture of many hi-tech goods including consumer electronics, advanced medical equipment and military hardware.
Re: wonder why the market isn't responding appropriately?
I'm of the opinion they wont implement their new TAX until they have to. Then It will only be enough to offset the gouging the WTO fought against.
The Chinese are all talk until they aren't.
WallllStreetMyWay
Couldn't respond to your private message, need more contextual information to find what you're looking for?
Re: China to substantially increase resource tax on REEs
hingfdiuh you are correct. This is a rough translation but it appears to be in response to the WTO. They realize they will soon see a hugh loss in "STATE" revenue and this is the developing plan to recapture that money.
http://translate.google.com/translate?hl=en&sl=zh-CN&u=http://finance.sina.com.cn/chanjing/cyxw/20140520/005819157108.shtml&prev=/search%3Fq%3Dhttp://finance.sina.com.cn/chanjing/cyxw/20140520/005819157108.shtml%26client%3Dsafari%26rls%3Den%26biw%3D1310%26bih%3D899
Our brewing once again raise the total reserves Ato00f:5r8aonreMaye2a0,r2t0h14 Erceonsoomiuc Irncfoermsat,ioan Dsaielyri?o?u42s0?d??e??c,?li2n,0e86?in??tainxthis
article collection
A further increase in the country's rare earth resources tax preparation Although rare defeat regulation WTO litigation new tactics Reporter Yang Ye Beijing reports
Rare WTO litigation face defeat, some rare earth export tariffs on the status quo will be canceled, the state of rare earth regulation and integration efforts will once again tightened. "Economic Information Daily" correspondent was informed a few days ago from the authorities, the relevant departments are working to improve the brewing again rare earth resources tax, internal regulation of rare earth industry means overweight.
"State Administration of Taxation, the Ministry of Finance and other ministries are being discussed and brewing estimated introduction of the second half." The source said, according to the current situation, rare earth resource tax may be greatly increased in the current standard, based on the specific ratio remains In the discussion.
Improve rare earth resource tax is seen as many people in the industry is an important means to control the rare earth industry. The authorities admitted to reporters, rare earth resource tax rate improved to enhance the market price of rare earths from the source, so that reflects the scarcity and environmental costs of mining resources and changing supply and demand through price increases, effectively reduce smuggling and other State purchase of hoarding rare phenomenon, while helping to reduce lost because of WTO on China's rare earth managed to bring negative effects.
In fact, they are taken to change the rare large-scale sale of cabbage situation has taken a number of policy measures. In 2007, China began to implement mandatory plan for rare earth production and decreasing export quotas to limit exports of rare earths, and improve individual rare earth export tariffs from 2011 onwards, in order to better protect the resource, in April 2011 for the first time a substantial increase in the rare earth resource tax. Reporters learned that, in 2011, the Ministry of Finance, State Administration of Taxation [microblogging] for the first time issued a notice, decided since the year April 1, uniform adjustment of rare earth mineral ore resources tax rate increases of more than 10 times. Rare earth resources tax was adjusted as follows: light rare earths including bastnaesite, monazite, 60 yuan / ton; heavy rare earth
including xenotime, ionic rare earth mine, 30 yuan / ton.
"Once the resource tax rose sharply again, the high cost of business will be more." One rare earth industry veteran told the "Economic Information Daily" reporters. On the other hand, a substantial increase in resources tax, indicating that the government is to take further measures to strictly control the rare earth resources, in this case, there may be higher rare earth prices.
Statistics show that, after a prolonged decline in the fourth quarter of 2013, rare earth prices have been close to the level in mid-2013 when the bottom. In the main producing areas of Baotou Rare Earth, for example, rare earth enterprises above the scale of the city's existing 34, January- March operating rate of 91.2%, the sales revenue 1.81 billion yuan, down 25.3%; profit only 210 million yuan, down 4.7%, from the export situation, the rare earth industry export delivery value of 31 million yuan, down 47.2 percent. Reporters learned that, with a large group of rare earth mining rights will take precedence benefit, including Baotou Steel Rare Earth (19.24, -0.17, -0.88%) , Xiamen Tungsten (24.22, 0.05, 0.21%) , Minmetals Rare Earth (20.15, -0.49, -2.37%) , Rising colored (33.98, -0.40, -1.16%) Chinalco and Ganzhou Rare Earth.
It is worth noting that, due to the global economic downturn coupled with reduced Chinese demand for rare earth, rare earth prices plummeted, while reducing the opening of the new foreign mining point of pressure. According to foreign media reports, although the United States has once again enabled molybdenite an old Mountain Pass mine in California, Malaysia, from a year ago to buy rare earths from Australia, geologists discovered over the past few years are also hundreds of new deposits in the world However, the construction of new mining point outside China enthusiasm has been significantly weakened.
There are indications that, through taxation to highlight the scarcity of rare earths is imminent. Centre for European Economic Research said until 2020 China will remain a monopoly in the field of heavy rare earths. Currently, about 90 percent of the world's rare earth products still come from China. "Global demand for Chinese rare earths could 'comeback', especially after the abolition of tariffs, only through internal regulation to protect valuable rare earth resources." Industry analysts pointed out. According to statistics, China's rare earth reserves remaining 27 million tons, accounting for more than the past down from the current 70% to 30% of total world reserves. At the current production rate, China's medium and heavy rare earth reserves only class for 15 to 20 years, is likely to be imported in the future.
Marketwise is that a trick question?
I've listened to all of their presentations and it depends on de-bottleneking the system. MCP would not comment on an exact time frame for the fix but did say sometime in the second half. They estimated Q4 minus interest as break-even and we are likely 5-6 more months behind that with these bottleneck problems. This is why the market has discounted the share price because it anticipates they will need to raise capital at least one more time before profitability is reached. So maybe this time next year or later. They could get lucky and get it done sooner and if the price of the RE's increase who knows but that's a roll of the dice.
Thanks, that put a smile on my face.
I take it you think we're near the bottom?
Re: Completely cashed out there.
I know what you're feeling, if you truly believe you'll wait and buy at the bottom. The only thing that has me hesitant is will they have to raise cash? So much preparation, so much potential and so close to the end goal and the market throws share certificates into the wind. If you want look at the historical SHO, there have never been enough shares to support these sell-offs. Where do all these shares come from? What the government needs to do is limit short trading to only the available inventory. You want to short an issue put the onus on the brokerage to find the shares first then allow or deny the trade its that simple. It's not like there is an endless supply so lets be real its finite. Don't get me wrong I believe in all the money making interments we have except those that create unbalanced supply.
http://regsho.finra.org/FNYXshvol20140514.txt
Depository Trust & Clearing Corporation
Re: the Chinese did not create this industry
No but we surrendered it to them.
National Rare Earth Cooperative Act of 2014 yea but I don't believe this congress can get that done. Maybe if Wall Street told them too. LOL As long as big business can get these elements cheap there is no real push and therein lies the problem.
Re: Where is our government?
"Carlyle supposedly appears in Q3" please explain? thought the Carlyle Group acquired someone who already controlled a number of shares, Resource Capital Funds I think.
Yes the Chinese government created this industry. The US government doesn't invest in businesses like the Chinese to give them a competitive edge. They should in some instances but they wont.
Wall Street owns the government, how else could corporations gain the rights of individuals in the supreme court, "corporate personhood." I'm still in AWE over that and using public tax dollars to bail out the banks and auto industry. Business and government are joined at the hip period.
Re: No brainer
I think the market responded as predicted.
There are some questions you want to tackle head on. Before Analyst Day there's been a series of articles asking the same questions over and over again. For Molycorp to ignore these questions and plow right past them was an insult to the investor. We are in ahh over Molycorp's technical prowess in the the plant they've completed. In not addressing the money questions the takeaway from the Analyst Day presentation was, "we dont know if we have enough cash to avoid another stock offering."
This presentation may have been a prelude to raising more cash? Maybe the point was to excite the public prior to another secondary?
Re: why panic?
RareEarths, Im not panicked, you read me all wrong I'm about the latest intel that can move a stock. Price movement in either direction is what makes us money. So if you figured me to only find and post the positive intel that was a mistake.
The Chinese could care less about Molycorp. They represent such a small portion of the market that their volume will have little impact on their sales. In that sense I see no conspiracies.
What the market is looking for is how Molycorp will move from a cash consumer to a cash producer. As long as they delay the answer to this question they will be punished.
With that said they could pull a Hail Mary and broadside the market and I hope they do! I'll submit to this possibility if this is what you're looking for. Molycorp stated that volumes could change suddenly with the de-bottlenecking process. I think this is what we'd all hope for but will it arrive before they need to raise additional cash?
Analyst Day
It was a pretty good presentation. The main questions were how long will it take to implement the debottlenecking processes. They mentioned the second half of the year. In the interim they expected to continue ramping up volume without the changes. Also one of the last questions was about the revenue streams which I found enlightening.
These were just Mountain Pass figures not including the value add from their other downstream operations.
Still the question of Financing Options loom? No direct answer to this question. Can they become self-sufficient before the cash runs out, or will they need to do another secondary?
We didn't hit my 8% bounce but the slow price erosion seems to have kicked in already.
With only a 4.92% dead cat bounce and the thestreet.com pounding in those last few nails you'd think someone would at least say a few comforting words. The consensus is Molycorp will have to return to the equity well within the next 7 months at its current cash burn rate. Molycorp may make it through these dark times and de-bottlenecked the process but with uncertain market conditions who will step forward and foot the bill?
I'm not expecting much from this event.
It will be telling to learn who's invited and who in the end attended. Carlyle might be there.
I combed the weekend looking for a ray of sunshine to report. Sadly the spin was all negative, so I'm not sure this is over.
Re: hard time putting this conspiracy story together
It's not happening for me. Computer driven trading is here to stay, unfortunately it works. Slanted news stories have always been used to sway money and are intentionally written for automated trading programs to utilize. I also don't need some TV Evangelist telling me which stocks to buy or sell. Its always been about research, research, research and unfortunately the REE market is filled with contradictory information and under the table deals so it's not very transparent.
For all those people who feel another developmental company is going to do better than Molycorp in this market the only advise I can offer is play the hype not the reality. Be nimble and ready to pull up stakes. If and I say "if "a company has the right mix of minerals its still going to take MANY YEARS to to get to the stage where Molycorp is currently, if at all. Molycorp was the real test to see if a Western company could make a go of it against the Chinese and they are a soup to nuts company. The problem is China has too much overcapacity and they are fighting amongst themselves for sales. Originally when Molycorp ran the numbers and put their business plan together prices were actually lower than they are now. Do I think they can still reach profitability, yes but it takes time, time the market is not going to easily excuse.
The only two things I can see is the shorts were well entrenched prior to the earnings announcement. But they had been amassing quarter over for some time. One year ago they were calling for a $2-$3 target and it took some real conviction to wait this out.
Second Molycorp set up analyst day to follow this earnings release. This may have been the tip of the hat that the Mountain Pass mine was experiencing some difficulties. With analyst day many traders were likely galvanized in their convictions about the stock movement and this helped precipitate it. In hind sight analyst day appears to be damage control for an anticipated post Q1 market reaction.
Personally I see progress in Molycorp's sales figures but the market was poised and ready to react as they did.
Here is the latest market endorsement from Michael Gambardella at JPMorgan. A little late but on the bandwagon.
http://investorwand.com/stock/247/mcp-molycorp-inc
I'm also looking for a bounce. There are 2 gaps which have never filled. Since they are now so far "percent wise" in the rear view mirror I have my doubts if they will.
Re: are there convertable bonds?
Yes
Molycorp prices debt, stock offer
http://www.bizjournals.com/denver/news/2012/08/17/molycorp-prices-debt-stock-offer.html?page=all
TEXT-S&P affirms Molycorp's 'CCC+' rating
http://www.reuters.com/article/2012/08/22/idUSWNA394920120822
Creating talk?
I'm looking for some of this stuff online about removing management. Also what's this about Jim Cramer? I haven't heard about or followed any recommendations from him about Molycorp.
If your just talking about message board chatter thats one thing but I haven't seen any press. Message board chatter is just someone trying to create or maintain some stock momentum.
I'm also interested in this insider information?
The preparation and execution was flawless. Tip of the hat to those who turned a dime.
Maybe but compared to previous short raids hitting the sell button didn't feel that way.
I dont use stops especially with really volatile stocks. If you've read my posts you know I like volatility. I weigh the attack and the sentiment of the market in general. If I feel a stock has been unfairly raided and feel the market will buy up the "opportunity" I will buy more and ride these bumps out confident the stock will return to its previous value. I don't get that sense with Molycorp at the moment. My felling is once a bottom is hit we get maybe an 8% bounce and a slow erosion to that figure as more seeds of doubt are sown. As I gage the media machine I feel like more loss is still ahead before cooler heads prevail.
I see media day right around the corner. In hind sight Molycorp set this up knowing an adverse market reaction to the Q1 numbers might happen. The market just demonstrated Q1 was the show me the money quarter, "or else." What do you think will happen going forward. Q2 will be the quarter that will demonstrate if Molycorp will have to return to the equity well. I dont see that as being very well received. To me Molycorp has turned into a short term trade until they can demonstrate they can make it through the storm. I think thats pretty "clear headed."
Lets hear what our chart experts have to say?
RareEarths, Are you declaring the all clear?
If I play again it will be just some day trades, drinking too much of that Moly-aid gives you a bad headache. I remember the days of buying a falling knife like this on a Friday hoping Monday would bring in the bargain hunters to save the day. I'm not so confident I'd buy here. Good luck guys.
betahighlander
Still watching the carnage. I started a 8,500 share position 04/15/2013 but I'm out as you may have deduced in my last post. Looks like they are aiming for the two's and the selling continues.
Does anyone remember if they have any loans secured with stock? This has been a well orchestrated take down. They now have a market cap of only 733.70M so they are ripe for the picking, anyone want a mine on the cheap?
Sorry I did find it online and invest the time after my post but it didn't change my mind on the markets interpretation so why repost. Knowing it was premarket tells me the market made up their mind and responded.
I certainly got the feeling if they need cash they will return to the equity markets.
The US government is paralyzed and after the automotive debacle and the banking bailout why would they risk more bad press. Wall Street seems resolute in reducing this venture into rubble and sweeping it back into the hole at Mountain Pass.
We can split hairs on the conference call if you want. As I already stated I didn't think things were so bad, certainly not a 20% haircut. My opinion doesn't matter, the market has spoken and they are not patient enough for a US rare earth company to come online. If you ask me Molycorp created some unrealistic expectations and there are a lot of people taking their pound of flesh for previously undelivered promises.
Lets play this forward, if they return to the equity markets this year, the markets will not treat them as well as they did last October.
So for me the honey moon is over and I can now hear the lynch mob assembling. An investor can only sit on dead money for so long. Understanding whats happening internally doesn't take the sting away and the markets response was "we've had enough." I've traded long enough to see a knee jerk reaction and today was a controlled steady exodus of 17,670,879 shares. Often you see noticeable short covering with moves like this, instead more piled on until the closing. It was sad.
Lets just say my optimism is waning.
Absolutely ugly -20%
Cant say I thought is was this bad. I also cant believe Molycorp let it get to this stage. Without question this quarter was the make it or break it quarter in the markets mind and the vote is in.
Tonights conference call will get heated to say the least. Those answers from company officials may determine the companies fate.
I'm filtering for the quarter over quarter differences:
The Company reported first quarter product sales volume of 3,518 metric tons (mt), a 10% increase over the fourth quarter 2013, at an average selling price ("ASP") of $33.69 per kilogram. Net revenues for the first quarter were $118.5 million, a 4% decrease from the fourth quarter 2013.
4% less with a 10% increase in sales volume so the Chinese dumping is still pulling profits lower. This cant be healthy for Chinese processors either.
Magnetic Materials and Alloys:
First Quarter 2014 Financial Results
Its Magnetic Materials and Alloys segment sold 1,374 mt of magnetic powders. Revenues for the segment were $55.9 million on ASP of $40.71/kg.
December 31, 2013 Its Magnetic Materials and Alloys segment sold 1,353 mt of magnetic powders. Revenues for the segment were $59.3 million on ASP of $43.82/kg.
On the Magnetic Materials and Alloys side we can see sales have increased by 1.5% over the last quarter but gross profits fell -5.7%.
FORM 10-Q
Magnetic Materials and Alloys' revenues were $55.9 million on sales volume of 1,374 mt for the three months ended March 31, 2014. This compares to sales of $54.7 million on volume of 1,263 mt for the three months ended March 31, 2013. ASP was $40.71 per kilogram in the first quarter of 2014, as compared to $43.29 per kilogram for corresponding prior-year period. The $1.3 million increase in revenues in this segment was primarily attributed to a 9% sales volume increase, partially offset by a decline in ASP of approximately 6% period-over-period. Due to an improved global macroeconomic environment, shipments from the traditional end-markets for the Neo Powders™ (hard disk drives and optical disc drives) were up approximately 20% over a year ago. The 20% increase in shipments from these markets translated into an approximately 5% increase in Neo Powders™ sales. The 6% period-over-period ASP decline was largely correlated to lower prices in rare earths. Prices for Nd2O3, a key element for the manufacturing of Neo Powders™, was about 12% lower in the fourth quarter of 2013, as compared to the fourth quarter of 2012 (prices in the Magnetic Materials and Alloys segment are set at a one-quarter lag).
I still need to read on. Overall I see they are becoming more efficient but this hasn't help them to offset the reduction in Chinese pricing. At this point it seems they need higher volumes to create larger profit margins. One factor against them was the end of the Japanese fiscal year and typically they reduce inventories this time of year so they must have done better volumes with other clients.
They seem to be headed in the right direction but need better market conditions and higher out put volumes. Their cash reserves seem ample for the year but if market pricing doesn't improve, and I think it will, they will need to tighten the belt sooner than later.
The indicators from the magnetics industry are encouraging. MCP is so heavily shorted it wont take but a penny or 2 of upside surprise and all hell will break loose. Right now the market is looking for ( -0.21 ) Good luck to you.