Why MP Materials Stock Fell 13% at the Open Today
Shares of MP Materials (NYSE: MP) dropped roughly 13% in the first 30 minutes or so of trading on March 23. When considering the 160% gain the stock has achieved since its initial public offering (IPO) in late 2020, that's not too big a deal. Still, the rare-earth miner did release two news updates after the market close on March 22 that investors don't appear to like very much.
The first bit of news was that a large stockholder would be selling 8 million shares in a secondary offering. The underwriter has the option to increase that by another 1.2 million shares. MP Materials won't see any of the proceeds from the sale and the shares won't increase the total number of issued shares. This is likely because they are related to the blank check process used to bring the company public, which included issuing shares to insiders. That said, with insiders selling shares into the open market, investors are probably concerned that people are opportunistically cashing out. If insiders continue to sell, it could put downward pressure on the stock.
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Source Fool.com
