Why USA Rare Earth Soared and Then Crashed This Week

It was a wild week for rare-earth stocks, and the drama was led by USA Rare Earth (NASDAQ: USAR). Here's how the stock ended up down 10.9% by Friday morning. The company started the week by announcing it had entered a Letter of Intent (LOI) with the U.S. Government, under which it would receive $277 million in Federal Funding and a $1.3 billion senior secured loan under the CHIPS Act. In conjunction with the LOI, the company arranged for a $1.5 billion private investment in stock from private investors "anchored by Inflection Point." The investment helps derisk USA Rare Earth's business plan (which involves producing magnets before developing the Round Top rare-earth deposit in Texas) and also helps secure a domestic supply of rare-earth magnets made with non-China-sourced materials. Continue readingWeiter zum vollständigen Artikel bei MotleyFool Weiter zum vollständigen Artikel bei MotleyFool