Mother of all Volume Spikes for Molycorp (MCP)

Molycorp, Inc. (NYSE: MCP) is going to have the mother of all volume spikes this Friday.  The company has priced a $180 million offering of 5.50% mandatory convertible preferred stock being sold by the company AND it priced 13,500,000 shares of common stock at a price per share of $50.00 which are being sold by the shareholders.  The $50.00 pricing is against a close of $51.15 on Thursday and is nearly a 10% discount of this week’s highs above $55.00.

Here is what you need to know… The dilution has been expected for quite some time and the details of this offering became much more clear at the start of this week.  We do not agree with necessarily every aspect of this call, but a fresh technical analysis was offered by INO in Molycorp and silver versus gold.

Shares are down 1.5% at $50.36 in the pre-market trading and we have seen more than 275,000 shares trade hands as of only 8:07 AM EST with nearly 90 minutes remaining in the pre-market.

Record volume days were as follows:

• January 24 at 11.35 million shares, $46.82 close;
• January 6 at 12.56 million, $52.86 close;
• January 4 at 14.395 million shares, $61.80 close;
• January 3 at 16.9 million shares, $57.50 close;
• December 28 at 16.67 million shares, $46.18 close;
• October 28 at 16.01 million shares; $33.89 close;
• IPO date of July 29 at 10.1 million shares; $12.85 close.

Today is very likely to challenge the record for an all-time high in share volume.  Oddly enough, not a single option strike price in Feb-2011 nor in March-2011 has an open interest of more than 10,000 contracts.

JON C. OGG

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7 Unusual Stock & Option Volume Standouts on Friday (ANN, CIEN, CSTR, DLB, JDSU, LVS, NG)

Friday is always an interesting day when it comes to volume spikes.  Buyout rumors, contract award rumors, drug events, management changes and more all tend to get speculated on each Friday.  We are looking at some key equity volume spikes as well as the options volume spikes that stand out as unusual.

AnnTaylor Stores Corp. (NYSE: ANN) saw unbelievable options trading Friday.  At 2:30 PM EST there had already been some crazy trading in the FEB-2011 $24.00 CALLS.  We saw some 26,757 contracts trade versus an open interest of only 929 contracts.  Shares were up 2.8% at $23.67 and volume in the stock was over 3 million shares versus average volume of 2.3 million shares.  The 52-week trading range is $14.21 to $28.24.  This is about 20X on options volume and it was all one-sided with no correlated PUT volume spike anywhere close to the same magnitude.

CIENA Corp. (NASDAQ: CIEN) was up as a JDSU winner… Shares at 2:30 PM EST were up 11.9% at $26.36 and they hit a new 52-week high of $26.95.  Volume was 14 million shares versus 5.86 million on average, call its almost 200% above normal volume.

Coinstar Inc. (NASDAQ: CSTR) is getting shelled again after earnings, odd considering that it had already warned about its results.  When bad gets worse… at 2:30 PM EST shares were down 12% at $38.88 against a 52-week range of $25.82 to $67.56.  The trading volume was over 9 million shares versus an average volume of about 1.7 million shares.

Dolby Laboratories, Inc. (NYSE: DLB) was down 9% at $55.96 and trading volume was over 3.1 million shares versus 532,000 shares on average.  This is despite earnings and revenue growth, and call that 500% volume spike!

JDS Uniphase Corporation (NASDAQ: JDSU) was partying like it was back in 1999… Shares hit the highest levels not seen since mid-2006 after revenues were ahead of expectations.  At 2:30 PM EST shares were up almost 26% at $22.58.  Volume was over 29 million shares versus about 4.8 million shares on average.  Shares are now up 200% from the year-low.

Las Vegas Sands Corp. (NYSE: LVS) saw active trading after a post-earnings sell-off.  Shares were down 7.6% at $46.43 on 41 million shares versus 34 million on average. The standout volume was in the options trading.  At 2:30 there were already more than 100,000 CALLS and over 40,000 PUTS in FEB-2011 expirations alone.

NovaGold Resources Inc. (AMEX: NG) was not active in stock but was a big standout in options. The March-2011 $11 PUTS saw a whopping 39,737 options contracts trade versus an open interest of 43,880 contracts.  Shares were up 0.9% at $14.78 and this appears to be a close-out trade rather than anything sinister as only 5.8 million shares had traded against average volume of about 6.2 million shares.

JON C. OGG

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