Here's Why USA Rare Earth Stock Surged, Again, Today

Another day and another double-digit share price for USA Rare Earth (NASDAQ: USAR). The stock rose by as much as 11% by 2 p.m. today. There are two reasons behind the move today. Ongoing speculation that events in Venezuela would lead to favorable trading relations with the U.S., and an opportunity for USA Rare Earth to procure rare-earth elements to feed its its Stillwater, Oklahoma magnet producing facility, As discussed previously, Venezuela is rich in rare earth elements, USA Rare Earth needs non-China sourced materials to produce magnets in Stillwater, and generate the earnings and cash flow to support development of the Round Top deposit in Texas starting in 2028. Consequently, if, and it's a big "if", it can do so, then its business model would be significantly derisked. The fact is that the company and its peers, such as MP Materials, trade on speculation surrounding political developments related to China's dominant position in rare-earth materials and magnets. When trade tensions escalate on the matter, investors begin to factor in the possibility of government support and commercial investment by major companies seeking to secure a domestic supply of magnets. Continue readingWeiter zum vollständigen Artikel bei MotleyFool Weiter zum vollständigen Artikel bei MotleyFool