MP Materials just got absolutely crushed.
We’re talking a drop from $100 to $65. This thing is looking pretty ugly right now.
But while everything was falling apart, I found myself thinking, “Maybe now is the time to grab some MP.”
And I did.
Why Uncle Sam Has My Back on This Trade
The U.S. government just became MP’s business partner in a massive way…
The Department of Defense locked in a $110 per kilogram price floor for MP’s rare earth output over the next decade. It committed to buying up to 7,000 metric tons of magnets per year with 100% offtake guarantee. Uncle Sam also dropped $400 million in equity investment, making it the largest shareholder at 15% of holdings.
So when I say the downside risk is pretty limited here on MP, I’m not just hoping.
Uncle Sam is literally backstopping MP’s revenue.
The Contrarian Setup I’m Seeing
While the market’s panicking about this 34% drop, they’re ignoring that this company just became critical to national security infrastructure.
The government needs these rare earth elements for everything from electric vehicles to defense systems. We’re done being dependent on China for 90% of global supply.
When you get billion-dollar government contracts and price guarantees, yet the stock trades like it’s going bankrupt, that disconnect creates opportunity.
Why I’m Playing This Into Earnings
During yesterday’s session, I grabbed some $70 calls on the gap close for the earnings run-up next week.
Here’s my logic…
With this government safety net, any positive earnings surprise gets amplified.
You’ve got shorts who need to cover, sidelined buyers ready to jump back in, and now federal backing to strengthen the bull case.
I don’t need MP to become a growth story.
I just need the market to remember that companies with guaranteed government customers probably shouldn’t trade like penny stocks.
What I’m Watching
A move back toward $70-$75 validates the bounce thesis.
If we reclaim $80, we’re really cooking.
But even if this trade doesn’t work immediately, I’m not worried about catastrophic downside.
When the government is your largest shareholder and guaranteed customer, the floor is real.
Your Action Plan
Most traders see a beaten-down mining stock. I see a strategic national asset that Uncle Sam just decided they can’t live without.
While others are running from the 34% drop, I’m walking toward it because the government just told me they’ll ensure this company succeeds.
Sometimes the best trades come when you have information the panic sellers are ignoring.
Right now, the market hasn’t fully processed what it means when Washington becomes your business partner.
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