Molycorp Shares Popped: What You Need to Know
Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of rare-earth miner Molycorp (NYS: MCP) jumped 15% today on news the company had signed a deal to make rare-earth magnets.
So what: Molycorp will partner with Daido Steel and Mitsubishi Corporation to make high-power rare-earth magnets. Molycorp will own 30% of the venture, which will be based in Nakatsugawa, Japan.
Now what: Molycorp has been aggressively expanding its business vertically and this is just another example of that move. The magnets are touted as the most powerful in the world and would help reduce energy consumption in electric motors. It's hard to put a value on the venture right now, but Molycorp is reducing its reliance on its mines alone, something I have criticized in the past, so at the very least it's a step in the right direction.
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At the time this article was published Fool contributor Travis Hoium does not have a position in any company mentioned. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings or follow his CAPS picks at TMFFlushDraw.Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.