New York, Jan 26, 2026, 18:03 EST — After-hours
- USA Rare Earth shares climbed 7.9% to $26.72 during regular trading but slipped lower in after-hours action
- Company revealed a non-binding U.S. funding plan linked to the CHIPS program alongside a $1.5 billion PIPE
- Traders are keeping an eye on the Jan. 28 PIPE closing deadline and the strides made toward finalizing government agreements
Shares of USA Rare Earth (USAR) climbed 7.9% to finish Monday at $26.72, before slipping roughly 1% in after-hours trading. The move followed the company’s announcement of a government-supported financing strategy linked to its U.S. rare-earths expansion. (Investing)
The company announced it has signed a non-binding letter of intent (LOI) with the U.S. Department of Commerce’s CHIPS program, outlining $277 million in proposed federal funding and a proposed $1.3 billion senior secured loan. Additionally, it secured a $1.5 billion private investment in public equity (PIPE) led by Inflection Point. CEO Barbara Humpton said the funds will help build a domestic “rare earth value chain.” Commerce Secretary Howard Lutnick described the initiative as a step toward making supply chains “no longer reliant on foreign nations.” (GlobeNewswire)
Washington is ramping up efforts to boost domestic supply of critical minerals vital for defense and high-tech manufacturing, as China remains the leading player in processing and magnets. The Commerce Department’s latest investment fits into a wider federal push to cut dependence on China for materials essential to weapons systems, electronics, and energy infrastructure. (AP News)
Reuters reported the Commerce Department plans to take a 10% stake in the Oklahoma-based firm, marking another move in a growing series of U.S. investments in miners. This follows earlier stakes in MP Materials, Lithium Americas, and Trilogy Metals. But unlike MP Materials’ previous deal, Reuters noted that USA Rare Earth’s package lacks any government price floor or guarantee. Humpton told investors the company pitches its value with a stark question: “What would be the cost of having access to nothing?” (Reuters)
A securities filing revealed USA Rare Earth inked a purchase agreement for roughly 69.8 million shares at $21.50 each in the PIPE. The company anticipates closing the private placement by Jan. 28, pending usual conditions. The filing also outlined that the planned government funding will roll out in phases based on milestones. It specified several hurdles before final agreements, such as raising non-federal capital and locking in memoranda of understanding with semiconductor users, among other criteria.
The stock saw volatile moves, fluctuating from $25.80 up to $32.07 during the session. It exchanged about 122 million shares—far exceeding its typical volume—before slipping back toward the mid-$20s. (The Motley Fool)
A PIPE involves a private investment in a publicly traded company, usually through new shares sold to institutions at a negotiated price. These deals often include warrants, granting the holder the option to purchase stock later at a set price.
Investors are drawn by something simple: a rare-earth “mine-to-magnet” strategy backed by government funds, in an industry that’s had trouble financing large U.S. ventures without federal aid.
But it’s a double-edged sword. The Commerce deal remains just an LOI, while the equity components—the PIPE along with shares and warrants reserved for the government—signal potential dilution if the funding package goes through as planned.
Markets are zeroing in on two key developments: whether the PIPE deal wraps up by Jan. 28, and any filings indicating the Commerce LOI is advancing to definitive agreements — something the company anticipates happening this quarter.
