MP Materials Stock Drops 6% After $6.5 Billion Offering Announcement

MP Materials, a prominent producer of rare earth elements based in the United States, has announced plans to raise approximately $6.5 billion through a stock offering. Following this announcement, the company's stock price experienced a significant drop of over 6% in pre-market trading. The offering involves the sale of 11,818,181 shares at a price of $55.00 per share, with an additional option for underwriters to purchase up to 1,772,727 more shares within 30 days to cover any over-allotments.

The proceeds from this offering are intended to support the acceleration and expansion of MP Materials' business operations. This includes investments in the 10X facility, strategic growth opportunities, and general corporate purposes. The completion of this offering is anticipated by July 18, 2025, subject to customary closing conditions.

This capital raise comes at a pivotal time for MP Materials, as the demand for rare earth elements continues to grow. These elements are essential components in various technologies, including electric vehicles, wind turbines, and consumer electronics. The global shift towards renewable energy and the increasing adoption of advanced technologies are driving this demand.

MP Materials' strategic move to raise capital through a stock offering is aimed at leveraging the growing demand for rare earth elements. With $6.5 billion in hand, the company will be well-positioned to invest in new mining projects, expand its processing capabilities, and develop innovative technologies. These investments will not only enhance MP Materials' competitive edge but also ensure a stable supply of rare earth elements to meet the increasing demand from various industries.

In addition to this capital raise, MP Materials has recently secured significant investments from major corporations. Just days prior, Apple announced plans to invest $5 billion in MP Materials. This investment includes the purchase of domestically produced rare earth magnets from MP Materials' Texas facility and the joint construction of two new factories: a magnet manufacturing base in Fort Worth, Texas, and an electronic waste recycling center in Mountain Pass, California. The recycled materials from the latter facility will be used in the production of future Apple products.

Furthermore, the U.S. Department of Defense recently announced a $4 billion investment in MP Materials. This investment is aimed at strengthening the domestic supply chain and reducing dependence on China for rare earth elements. This strategic partnership underscores the importance of MP Materials in the global rare earth market and its role in ensuring a secure supply of these critical materials.