The Mosaic Company (NYSE: MOS), the combined Cargill Crop Nutrition and IMC Global Inc., began trading as a Fortune 500 company immediately after its 2004 IPO, and became a dominant player in the fertilizer business.
In just a few short years, Mosaic would be in prime position to ride a global boom in agricultural crop demand that resulted in its shares skyrocketing more than $130 from trough to peak.
From a valuation standpoint, the move higher was completely justified and rational -- up to a point. When the hedge fund momentum investors climbed aboard, astute investors knew that the rapid rise was due for a correction.
The stock sold off hard during the summer, which culminated in a complete washout due to the credit crisis and global economic meltdown. MOS shares fell back to the mid-$30s.
As is often the case, the selling went too far and had more to do with forced liquidations instead of rational valuation metrics.
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