1. Based on public available data and US DOD floor price $110 per kilogram, MP is way expensive now. If MP can substiute all import from china and all other countries, and DOD buy all its products, the total sale could be some where between $665,657,142.86 to $992,357,142.86. Using yesterday' market value, the P/s is somewhere between 15-22.
that is very high.
2. and calculation is based up two assumptions: a) US DOD buy all its products. but that is not the case, DOD will buy certain products only; a) MP will be only rare earth producer in US. This is also not true.
Therefore, its sales will be much lower, resulting a much higher P/s
3. I do not think it has enought captial. Now JPM/GS help them get 1 billion committment, and DOD provide 550 million. That is 1.55 billion. (aapl's 500 million only for recycle magnets). This is not enough. a) its has negative cash flow. that needs to be covered on yearly basis; b). cost over run is more likely.
in short, I sold my MP this morning.
