Why Did Molycorp Insiders Buy Stock Before Shares Hit An All-Time Low?
Shares of Molycorp Inc. (NYSE:MCP) fell by more than a quarter of their value on Friday - to their lowest in history, in fact - after the rare earth mining company announced it was encountering financial troubles.
However, in the months leading up to the stock's historic drop, insiders at Molycorp were buying up hundreds of thousands of dollars worth of stock through insider trades, suggesting the struggles could potentially be short term.
According to CBS news, the Colorado-based company announced late on Thursday that it would have less funds for mining than it estimated at the beginning of the year. Now, it is having to renegotiate with its financiers, which will include acquiring funds for equipment and mining facilities.
"We cannot assure you that we will be able to obtain any financing on commercially acceptable terms or at all," Molycorp said in a statement.
The company also recently reported a loss of $67.6 million for the second quarter of the year.
In the last three months, company officials have bought a total of $350,420 in shares, which ranged in price from $20.26 to $20.50.
Why do you think these shares were bought before such a drastic fall?
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