Why MP Materials Stock Dropped on Friday

MP Materials (MP -10.59%) shares fell sharply, dropping 9% by mid-afternoon Friday following a Financial Times report highlighting a potential competitive threat to the company's rare earth mining and magnet production ambitions.

The catalyst? A $150 million investment by major automakers in Niron Magnetics, a startup developing iron nitride magnets that could challenge rare earth-dependent technologies. Niron claims its Minnesota factory will produce magnets 18% more powerful than some rare earth alternatives—at scale.

While government subsidies and industry backing mirror MP Materials' own support network, Niron's technology remains unproven at commercial scale. The market's reaction reflects anxiety about technological disruption, not immediate obsolescence of rare earth solutions.