Molycorp Hits All-Time Lows On Takeover Concerns

Molycorp MCP took another leg down Wednesday, dropping over 13 percent and hitting all-time lows as pressure builds on the company to raise capital.

Bloomberg reported late Tuesday that Leon Black's Apollo Capital Management bought up to 22 percent of the company's convertible debt and is positioning itself to take control of the company.

In the first half of this year alone, Apollo has reportedly acquired $17 million worth of Molycorp's $230 million bonds due in 2016.

Molycorp has reported losses for nine straight quarters and it may run out of cash in approximately seven months if it doesn't turn around operations. If Molycorp doesn't, it runs the risk of having the company taken over by Apollo in a restructuring deal.

A Seeking Alpha article posted Wednesday postulates that both scenarios are likely to result in an equity dilution for shareholders.

Shares of Molycorp are down 13.5 percent at $1.96.