MP Materials Announces Increase to its Share Repurchase Program

Rhea-AI Summary

MP Materials (NYSE: MP) has increased its share repurchase program by $300 million, bringing the total authorized amount to $600 million. The program has been extended until August 30, 2026. Since August 1, 2024, the company has repurchased 1.4% of its shares (approximately 2.2 million) at an average price of $10.84. In 2024, MP Materials has repurchased 8.6% of its common stock for a total of $225.1 million. The company's CEO, James Litinsky, expressed confidence in the long-term value of MP Materials' assets and platform. The repurchase program allows for various methods of share acquisition, with timing, pricing, and amount subject to management's discretion based on market conditions and other factors.

Positive

• Increased share repurchase program by $300 million to $600 million total
• Repurchased 8.6% of common stock for $225.1 million in 2024
• Extended repurchase program until August 30, 2026
• Management's confidence in long-term value of company assets

Negative

• Average repurchase price of $10.84 per share indicates potential stock price decline

Insights

Financial Analyst

MP Materials' decision to double its share repurchase program to $600 million signals strong confidence in the company's intrinsic value. The extension of the program until 2026 provides flexibility and a long-term commitment to shareholder value. The company has already repurchased 8.6% of outstanding shares in 2024, demonstrating aggressive execution.

The average repurchase price of $10.84 per share suggests management believes the stock is undervalued. This move could potentially boost earnings per share and return on equity. However, investors should note that share repurchases don't directly improve business fundamentals. The focus on maintaining a "fortress balance sheet" while being opportunistic is a prudent approach, balancing growth investments with shareholder returns.

Market Research Analyst

The increased share repurchase program reflects MP Materials' strategic response to current market conditions. With the stock price significantly below its 2021 highs, management likely sees an opportunity to create value. This move could help stabilize the stock price and signal confidence to the market.

However, it's important to consider the broader context of the rare earth elements industry. Geopolitical tensions and supply chain concerns have impacted the sector. Investors should weigh this capital allocation decision against potential investments in operational expansion or vertical integration that could strengthen MP Materials' competitive position in the long term. The company's ability to balance these priorities will be key to its future success in the evolving rare earth market.

LAS VEGAS--(BUSINESS WIRE)-- MP Materials Corp. (NYSE: MP) (“MP Materials” or the “Company”) today announced that its Board of Directors has approved a $300 million increase to the Company’s existing share repurchase program, bringing the total authorized amount to $600 million. The share repurchase program has also been extended and is now effective until August 30, 2026.

Subsequent to the most recent earnings announcement on August 1, 2024, MP Materials repurchased 1.4% of the Company, or approximately 2.2 million shares, at an average price of $10.84. Together with repurchases made in March, MP Materials has now repurchased approximately 8.6% of the Company’s shares of common stock for a total of $225.1 million in 2024.

“We remain very confident in the long-term value of our assets and the MP platform,” said James Litinsky, Founder, Chairman, and CEO of MP Materials. “As we have consistently stated, subject to continuing to maintain a fortress balance sheet, we expect to be opportunistic in our approach to capital allocation to create value for shareholders.”

MP Materials may purchase shares from time to time at the discretion of management through open market purchases, privately negotiated transactions, block trades, accelerated or other structured share repurchase programs, or other means. The manner, timing, pricing and amount of any transactions will be subject to the discretion of MP Materials and may be based upon market conditions, regulatory requirements and alternative opportunities that MP Materials may have for the use or investment of its capital.

About MP Materials

MP Materials (NYSE: MP) produces specialty materials that are vital inputs for electrification and other advanced technologies. MP’s Mountain Pass facility is America’s only scaled rare earth production source. The Company is currently expanding its manufacturing operations downstream to provide a full supply chain solution from materials to magnetics. More information is available at https://mpmaterials.com/.

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We routinely post important information on our website, including corporate and investor presentations and financial information. We intend to use our website as a means of disclosing material, non-public information and for complying with our disclosure obligations under Regulation FD. Such disclosures will be included in the Investors section of our website. Accordingly, investors should monitor such portion of our website, in addition to following our press releases, Securities and Exchange Commission filings and public conference calls and webcasts.

Forward-Looking Statements

Certain statements included in this press release that are not historical facts are forward-looking statements under Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements may be identified by the use of the words such as “estimate,” “plan,” “shall,” “may,” “project,” “forecast,” “intend,” “expect,” “anticipate,” “believe,” “seek,” “target,” or similar expressions that predict or indicate future events or trends or that are not statements of historical matters. These forward-looking statements include, but are not limited to, expectations regarding the share repurchase program and the ability of the Company to complete the share repurchase program within the two year time period. These statements are based on various assumptions, whether or not identified in this press release, and on the current expectations of our management and are not predictions of actual performance. These forward-looking statements are provided for illustrative purposes only and are not intended to serve as, and must not be relied on by any investor as, a guarantee, an assurance, a prediction or a definitive statement of fact or probability. Actual events and circumstances are difficult or impossible to predict and will differ from assumptions. Many actual events and circumstances are beyond the control of MP Materials. These forward-looking statements are subject to a number of risks and uncertainties, including, without limitation, the Company’s ability to execute the contemplated share repurchase program on attractive terms, the anticipated timing or at all; and those risks and uncertainties discussed in MP Materials’ Annual Report on Form 10-K filed on February 28, 2024, under the heading “Risk Factors” and other documents filed by MP Materials with the SEC. If any of these risks materialize or our assumptions prove incorrect, actual results could differ materially from the results implied by these forward-looking statements. There may be additional risks that MP Materials does not presently know or that MP Materials currently believes are immaterial that could also cause actual results to differ from those contained in the forward-looking statements. In addition, forward-looking statements reflect MP Materials’ expectations, plans or forecasts of future events and views as of the date of this press release. MP Materials anticipates that subsequent events and developments will cause MP Materials’ assessments to change. However, while MP Materials may elect to update these forward looking statements at some point in the future, MP Materials specifically disclaims any obligation to do so, unless required by applicable law. These forward-looking statements should not be relied upon as representing MP Materials’ assessments as of any date subsequent to the date of this press release. Accordingly, undue reliance should not be placed upon the forward-looking statements.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240903642500/en/

Investors:

Martin Sheehan

IR@mpmaterials.com

Media:

Matt Sloustcher

media@mpmaterials.com

Source: MP Materials

FAQ

What is the new total amount authorized for MP Materials' share repurchase program?

MP Materials has increased its share repurchase program by $300 million, bringing the total authorized amount to $600 million.

How much of its stock has MP Materials (NYSE: MP) repurchased in 2024?

In 2024, MP Materials has repurchased approximately 8.6% of its common stock for a total of $225.1 million.

When does MP Materials' (NYSE: MP) extended share repurchase program end?

The extended share repurchase program for MP Materials is now effective until August 30, 2026.

What was the average price per share for MP Materials' recent stock repurchases?

MP Materials repurchased shares at an average price of $10.84 per share in its most recent repurchase activity.