USA Rare Earth Secures $75M PIPE Investment, Stock Falls 18%

USA Rare Earth Inc (NASDAQ:USAR) shares are trading lower by 18.3% to $10.51 during Wednesday’s session after the company announced a $75 million equity financing through a private investment in public equity (PIPE) with a new institutional investor.

What To Know: The funds will support capital expenditures for its rare earth magnet manufacturing facility in Stillwater, Oklahoma, as well as working capital and operating costs.

CEO Joshua Ballard highlighted the importance of the investment in advancing the company's mission to establish one of the largest domestic sintered rare earth magnet plants, which are vital to U.S. defense, consumer, technology and industrial sectors.

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As part of the PIPE, USA Rare Earth will issue roughly 8.55 million shares of common stock, 2.16 million pre-funded warrants, and additional warrants to purchase shares equal to the total issued, all at a $7.00 strike price and expiring in six years.

The deal includes standard resale registration rights and is contingent upon stockholder approval, which appears secured by majority support agreements.

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How To Buy USAR Stock

Besides going to a brokerage platform to purchase a share – or fractional share – of stock, you can also gain access to shares either by buying an exchange traded fund (ETF) that holds the stock itself, or by allocating yourself to a strategy in your 401(k) that would seek to acquire shares in a mutual fund or other instrument.

For example, in USA Rare Earth’s case, it is in the Materials sector. An ETF will likely hold shares in many liquid and large companies that help track that sector, allowing an investor to gain exposure to the trends within that segment.

According to data from Benzinga Pro, USAR has a 52-week high of $20.00 and a 52-week low of $5.56.