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NEW YORK - MP Materials Corp. (NYSE:MP), whose stock has surged over 270% year-to-date according to InvestingPro data, announced Wednesday it has commenced a $500 million underwritten public offering of its common stock, with all shares to be sold by the company.
The rare earth materials producer, currently trading near its 52-week high of $62.87, said it plans to grant underwriters a 30-day option to purchase up to an additional 15% of shares solely to cover over-allotments at the public offering price, less underwriting discount. InvestingPro analysis indicates the stock is currently overvalued, with multiple indicators suggesting caution, including overbought RSI levels.
According to the press release statement, MP Materials intends to use proceeds from the offering to fund acceleration and expansion of its operations, including its 10X Facility, strategic growth opportunities, and general corporate purposes.
J.P. Morgan Securities LLC and Goldman Sachs & Co. LLC are acting as lead joint book-running managers for the offering, with Morgan Stanley & Co. LLC also serving as a book-running manager.
The offering is subject to market and other conditions, with no assurance provided regarding whether or when it may be completed, or its actual size or terms.
MP Materials filed a shelf registration statement with the Securities and Exchange Commission that became automatically effective on February 28, 2025. A preliminary prospectus supplement and accompanying prospectus relating to the offering will be filed with the SEC.
MP Materials describes itself as America’s only fully integrated rare earth producer with capabilities spanning mining and processing to advanced metallization and magnet manufacturing. The company extracts and refines materials from a rare earth deposit in California and manufactures permanent magnets used in transportation, energy, robotics, defense, and aerospace sectors. Financial data from InvestingPro shows the company maintains strong liquidity with a current ratio of 4.12, though it operates with moderate debt levels and faces profitability challenges. Discover 14+ additional key insights about MP Materials with an InvestingPro subscription, including detailed analysis in the comprehensive Pro Research Report.
In other recent news, MP Materials has made significant strides in expanding its business through strategic partnerships and analyst support. The company announced a $500 million multiyear partnership with Apple to produce rare earth magnets from 100% recycled materials, which includes a $200 million prepayment from Apple. This development has led DA Davidson to reiterate its Buy rating and maintain a $32 price target for MP Materials. Canaccord Genuity has raised its price target on the company to $64, citing increased demand from Apple, which could significantly boost MP Materials’ revenue. Meanwhile, TD Cowen has more than doubled its price target to $55, following MP Materials’ public-private partnership with the Department of Defense, which includes a 15% convertible stake for the DoD. This partnership is expected to enhance MP Materials’ processing capabilities and expand its magnet production capacity. Analysts have noted that these agreements could lead to increased cash flow and strengthen MP Materials’ position in the rare earth materials sector. These recent developments underscore the company’s growing influence and potential in the industry.
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