MP Materials Stock Plummets: Friday’s Brutal Selloff Explained

Rare earth miner MP Materials got crushed by investors—here's why the bleeding happened.

Market forces turned toxic for the specialty materials player. Friday's trading session saw shareholders dumping positions like hot potatoes.

The selloff wasn't subtle—it hit with the subtlety of a sledgehammer. No single catalyst emerged, just perfect storm conditions converging at once.

Commodity volatility struck again. Because nothing says stable investment like betting on geopolitical supply chains and industrial demand cycles.

MP Materials now faces the music. The rare earth specialist must convince markets it's built for turbulence—not just riding boom cycles.

Image source: Getty Images.

Could Niron replace MP?

Automotive giantsand, along withand, are investing $150 million in a start-up called Niron Magnetics, which aims to make magnets from common elements such as iron and nitrogen -- rather than rare earth elements (which aren't exactly rare, but can be hard to refine). Various U.S. government agencies have granted the company nearly $70 million more in tax credits and other subsidies.

Niron is building an iron nitride magnetics factory in Minnesota, capable of producing 1,500 tons of magnets annually, and says its magnets will be 18% more powerful than certain -- much more expensive -- rare earth magnets.

Is MP Materials stock a sell?

I wouldn't panic just yet, however. While Niron's magnets have been reported to be better than some of the best rare earth magnets, this appears based on lab reports at present, and the company hasn't yet proven it can produce magnets of the reported superiority, at scale, and at affordable prices.

It's also worth noting that while Niron has attracted substantial support from government and industry, so too has MP Materials -- up to and including the U.S. government taking an equity stake in the company. And MP Materials has a huge lead in building out mining and manufacturing operations to support production of its own magnets.

True, if all of Niron's claims prove out, there could be risk to MP here. But it's a big "if," and too soon to tell just how big of a risk.