(This is an excerpt from an article I originally published on Seeking Alpha on December 12, 2012. Click here to read the entire piece.)
It turns out that recent put buyers in Molycorp (MCP) may have had the right idea, but their bearish trade may have a very short shelf life.
After hours on December 11th, MCP announced that the Board of Directors appointed Constantine Karayannopoulos – who came to MCP courtesy of the Neo Materials acquisition in March – to serve as Interim President and Chief Executive Officer to replace former CEO Mark A. Smith. Smith left MCP under mysterious circumstances and the dark shroud of an SEC investigation. Strangely, MCP rallied ahead of this latest bombshell. {snip}
Intra-day trading in MCP was a fascinating display of leaked information and panicked options buying. {snip}
Source: FreeStockCharts.com
{snip}
Source: NASDAQ.com short interest
All this trading in MCP indicates the stock will continue to be a powder keg, up or down. Given the strong history of the new interim CEO, I believe that shorts are likely going to take this opportunity to start closing out positions (or hedge even more). I could be wrong given all the insider buying in the stock has not deterred bearish bets against MCP. {snip}
Be careful out there!
(This is an excerpt from an article I originally published on Seeking Alpha on December 12, 2012. Click here to read the entire piece.)
Full disclosure: long MCP