Why Is MP Materials Stock Rising Today?

MP Materials Corp (MP) shares rose 2% before the bell on Wednesday, with the stock becoming the ninth-most trending ticker on Stocktwits after the company reportedly stated that the investment it received from the Pentagon for the construction of domestic U.S. rare earths capacity would not be easily replicated by other companies.

According to a Bloomberg report, the Pentagon agreed in July to a $400 million preferred equity investment in MP, following the U.S. concern about industrial shutdowns triggered by China's curbs on exports of rare earth magnets.

Retail sentiment on MP Materials improved to ‘extremely bullish’ from ‘bullish’ territory, with message volumes at ‘high’ levels, according to data from Stocktwits. The retail user message count on the stock jumped over 41% in the last 24 hours on Stocktwits.

The report stated that the Pentagon's deal, which also includes a supply agreement with a guaranteed floor price, is viewed as a pivotal turning point for an industry that has long been troubled, even before the current year's upheaval.

Bloomberg noted that the move had also sparked discussions about how much support could be extended to other companies, both within and outside the U.S. CEO James Litinsky told Bloomberg that the company’s diverse portfolio of assets was a key factor in the deal.

“One unique thing that we offered is that we’re the only company in the world that’s fully vertically integrated, and if the government is going to support a solution, they need to make sure that the solution works,” Litinsky said in an interview with Bloomberg on the sidelines of a rare earths event in Toronto.

“You really have to have a full supply chain offering before you go to the U.S. government,” he added.

Shares of MP Materials have gained nearly 380% this year.

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Also See: Amazon Shares Rise 2% Pre-Market After Wells Fargo Upgrade, AWS Growth Sparks Investor Optimism

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