MP Materials Stock Slides As Company Unveils $500M Offering After Securing Apple, Pentagon Deals

MP Materials (MP) stock slipped 4.7% in extended trading on Wednesday after the company launched an offering of shares worth $500 million, a day after signing a deal to supply rare earth magnets to Apple.

The firm also expects to grant the underwriters of the offering a 30-day option to buy an additional 15% of the shares of its common stock to be sold in the offering, to cover over-allotments. J.P. Morgan Securities and Goldman Sachs & Co. are acting as lead joint book-running managers of the offering, MP Materials said.

MP Materials' stock has gained over 86% in the past month after inking deals with the Department of Defense and Apple. Wednesday’s closing price of $58.55 gave it a market valuation of $9.6 billion.

The company stated that it intends to use the net proceeds from the offering to fund the acceleration and expansion of its operations, including the 10X Facility, for strategic growth opportunities and general corporate purposes. MP Materials, which operates the world’s second-largest rare earth mine, has been looking to bolster its manufacturing capabilities.

Retail sentiment on Stocktwits about MP Materials was in the ‘extremely bullish’ territory at the time of writing, while retail chatter was ‘extremely high.’

The stock jumped 20% on Tuesday after the company signed a $500 million deal with Apple to supply rare earth magnets to the iPhone maker from its facility in Fort Worth, Texas. 

The company expects to begin magnet shipments in 2027 and ramp up to support hundreds of millions of Apple devices. The two companies will also collaborate to accelerate technological advancements in magnet production, as well as end-of-life recovery.

Last week, the company also signed a multi-billion-dollar deal with the Pentagon, under which the defense department will become its largest shareholder. The company said it will construct a second facility called 10X, which will boost its U.S. rare earth magnet manufacturing capacity to an estimated 10,000 metric tons.

"This company seems like a unicorn, especially since it is the only US rare earths company that already has the infrastructure to support large orders and only needs to scale up to keep up with orders from DoD and Apple," one trader said on Stocktwits.

The deals came amid a standoff between the U.S. and China over exports of rare earth magnets, which are used in various products, including smartphones and military equipment. China controls the bulk of the rare earth magnet supplies.

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