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IPO and Insider Purchases in Molycorp Inc. (MCP)

Several insiders of Molycorp Inc. (MCP) bought more than 4 million shares of the company at the IPO price of $14. The IPO was a disappointment; they were planning to sell the shares between $15 and $17 but ended up selling them at $14. There was not much enthusiasm. Insiders bought the shares at $14 on August 3rd and on August 5th the shares dipped below $13. What would have happened if you stepped in and bought some shares at $13 on that day? You could have been a big winner.

Molycorp shares closed at $22.20 on September 18, 2010. That’s a return of more than 70%. Insiders’ return has been 58.6% in less than 2 months.