Molycorp (MCP) Shares Give Back Gains as JPMorgan Questions Molymet Deal

After opening up about 0.8 percent and continuing another 3 percent higher early Wednesday morning, shares of Molycorp (NYSE: MCP) are now well into negative territory as an analyst at JPMorgan issued some intraday cautious comments. The stock last traded at $30.38, down 1.9 percent from Tuesday's close.

Traders were buying earlier after Molycorp announced a $390 million investment from Molymet. JPMorgan's Michael Gambardella, however, doesn't see any strategic benefits from such a deal. More concerning, the timing of the investment without "immediate" use for the cash brings up questions related to the health of the rare earth market and Molycorp's cash flow.

Gambardella maintains a Neutral rating and $39 price target on shares of Molycorp.

Visit our Analyst Ratings page to track all the market-moving analyst action on shares of Molycorp.

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