New York, Jan 27, 2026, 08:50 EST — Premarket
- USA Rare Earth (USAR) slipped 2.7% to $26.01 in premarket, following a 7.9% gain to $26.72 on Monday.
- The company revealed a non-binding U.S. government plan worth $1.6 billion, paired with a $1.5 billion private placement priced at $21.50 per share.
- Investors are focused on funding conditions, the risk of dilution, and whether the company secures customers for its upcoming mine and magnet plant.
USA Rare Earth shares slipped in early trading Tuesday following the announcement of a U.S.-supported financing deal that caught traders’ attention. (Public)
On Monday, the company announced it had received a letter of intent for a $1.6 billion debt-and-equity package aimed at backing a Texas mine and a magnet facility in Oklahoma. This move is part of a larger effort to boost domestic supply of key materials that China currently dominates. The announcement came alongside a $1.5 billion financing round, which would bring the total new funding under discussion to around $3.1 billion. Management told investors more capital will still be needed. CEO Barbara Humpton summed up early demand bluntly: “What would be the cost of having access to nothing?” (Reuters)
Rare earths consist of 17 elements essential for magnets and various parts in devices ranging from consumer electronics to defense equipment. But for this stock, the spotlight isn’t on the geology right now — it’s on the terms, and what the U.S. government demands in exchange.
A U.S. securities filing revealed the Commerce Department’s plan involves $277 million in direct awards under the CHIPS Act, alongside a proposed $1.3 billion, 15-year senior secured loan priced at Treasury plus 150 basis points. The company would issue around 16.1 million shares to the U.S. government for the $277 million award, the filing said, and grant warrants—options to buy shares later—that would equal about 10% of fully diluted shares outstanding before the private placement. Funding would be released in phases, linked to specific milestones.
The filing also laid out what the company needs to do before finalizing agreements: raise at least $500 million from non-federal investors, obtain memoranda of understanding from semiconductor end or midstream users, and secure specific feedstock and supply contracts, among other conditions. Additionally, USA Rare Earth plans to wrap up its $1.5 billion private placement—a PIPE, or private investment in public equity—on Jan. 28, issuing roughly 69.8 million shares priced at $21.50 each.
USA Rare Earth is moving forward with its Round Top project near Sierra Blanca, Texas, and said its magnet manufacturing plant in Stillwater, Oklahoma, should start up later this year. The company’s Monday announcement placed it alongside other U.S.-listed critical minerals players drawing government focus, like MP Materials and Lithium Americas.
However, the financing won’t be locked in until the final paperwork is signed, and the funds will arrive in stages. The deal’s setup also suggests dilution—between shares, warrants, and the PIPE stock. Execution risk remains the main concern.
Traders are eyeing the Jan. 28 PIPE closing closely, along with any word on definitive agreements with Commerce. The key question: can the company fulfill its stated conditions, particularly on customer-related MOUs, ahead of the next round of funding?
