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USA Rare Earth Stock Volatility Follows Acquisition Announcement
USA Rare Earth Stock Volatility Follows Acquisition Announcement
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BTCCSquare news:
USA Rare Earth (USAR) stock experienced a sharp 10% surge in early trading Monday before relinquishing all gains, settling nearly flat by afternoon. The volatility followed news of its $100 million acquisition of UK-based Less Common Metals (LCM), a specialist in rare earth alloys.
The deal positions USAR to become a major non-Chinese producer of samarium cobalt and neodymium alloys. While LCM's $17.4 million revenue dwarfs USAR's nonexistent sales, the acquisition will leave the combined entity trading at 100x trailing sales. USAR plans to fund the purchase using nearly all of its $120 million cash reserves, supplemented by $125 million from an existing investor.
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