Here's Why Shares in MP Materials Declined in June

The decline in MP Materials (NYSE: MP) stock in June comes down to China, but perhaps not in the way you might think. The stock fell 13.4% in June, according to data from S&P Global Market Intelligence, with much of the decline occurring after China added MP Materials to its list of companies subject to export controls. Here's the lowdown.The company's exposure to political risk around China is multifaceted. On the one hand, it has substantive upside potential from ongoing geopolitical tension with the country. After all, it's the need to diversify the U.S. away from reliance on rare earth materials and magnets from China that's largely behind the U.S. government's support for the company. And that support is a key part of the stock's investment case. As part of the partnership agreed last summer, the Department of Defense invested $400 million in the company, provided a $150 million loan, and assisted banks in arranging $1 billion in financing. On top of all of this, the DoD entered a 10-year pricing floor agreement for MP Materials products and "agreed to ensure that 100% of the magnets produced at the 10X Facility will be purchased by defense and commercial customers with shared upside." Continue readingWeiter zum vollständigen Artikel bei MotleyFool Weiter zum vollständigen Artikel bei MotleyFool