New York, January 26, 2026, 5:17 PM (ET) — After-hours
USA Rare Earth shares climbed roughly 8% to $26.72 in late after-hours trading Monday, trimming a sharper gain from earlier in the session. The boost came after the company revealed a government-backed funding plan linked to its rare earth goals. During the day, the stock swung between $25.81 and $39.91, with around 122 million shares changing hands.
These developments carry weight as Washington commits significant funds to the rare earth supply chain—a strategy investors view as a blend of industrial policy and national security. Rare earth elements are essential for devices ranging from smartphones to electric vehicles. The U.S. has been actively working to reduce reliance on foreign sources, particularly in processing. 1
USA Rare Earth announced a non-binding letter of intent with the Commerce Department’s CHIPS Program that lays out $277 million in proposed federal funding alongside a $1.3 billion senior secured loan. In exchange, the company plans to issue 16.1 million shares and about 17.6 million warrants. The company also said it secured $1.5 billion through a private investment in public equity (PIPE). CEO Barbara Humpton described the deal as “an unprecedented show of public and private support.” 2
In materials tied to the announcement, the company said the PIPE deal aims to close by January 28, pending usual conditions. Meanwhile, CHIPS Program funding and loan disbursements are expected this quarter if the related agreements are finalized. The firm also outlined targets including commercial production at its Round Top deposit by 2028, with output goals extending through 2030. 3
Reuters reported over the weekend that the Trump administration intends to acquire a 10% stake in the Oklahoma-based firm, tied to a $1.6 billion debt-and-equity deal. A separate private funding round is also anticipated. According to the report, the government’s shares and warrants would be priced close to the stock’s level earlier this month. 4
The surge in USA Rare Earth failed to boost its peers across the board. MP Materials dropped roughly 8.8%, while Lithium Americas slipped around 7.1%, despite investors processing yet another instance of Washington’s involvement in the sector.
A PIPE involves selling stock directly to chosen investors instead of launching a public offering, which usually means dilution risk for current shareholders. Warrants complicate this further, giving holders the option to purchase shares later at a fixed price. 5
This trade carries significant risks. Reuters noted the government package lacks a price floor or any price guarantee. Executives admitted the company still doesn’t have customers and is marketing itself as a “safety stock” supplier. Humpton asked investors, “What would be the cost of having access to nothing?” 6
Axios pointed out a bigger “reality check” for investors: easing China’s hold on these supply chains won’t happen overnight. The deal still faces diligence, final agreements, and regulatory approvals. That means headline risk stays elevated — around both timing and deal terms. 7
Investors are focused on turning paper into cash. A U.S. securities filing revealed the company plans to sell around 69.8 million shares at $21.50 each in a private placement valued at roughly $1.5 billion, aiming to close the deal on January 28. The filing also details conditions the company must satisfy before finalizing agreements for the anticipated government transaction, such as obtaining memoranda of understanding from semiconductor users and locking in supply agreements for feedstock.
