Staff Reporter
Investors in USA Rare Earth (USAR) have experienced a rollercoaster ride this year. Following its merger with a special purpose acquisition company (SPAC) on March 14, the stock plummeted by 68% through the end of March.
However, April brought a dramatic turnaround, with shares surging 76.9%, according to S&P Global Market Intelligence.
The spotlight on rare earth elements intensified last month as President Donald Trump indicated his administration’s commitment to strengthening the nation’s supply of these critical materials.
This development is particularly beneficial for USA Rare Earth, which is working on a rare earth magnet manufacturing facility in Oklahoma.
President Trump’s Focus on Rare Earth Elements
In mid-April, President Trump signed an executive order launching an investigation into the risks posed by U.S. dependence on imports of rare earth elements and other crucial materials.
As a result, USA Rare Earth caught the attention of investors, given its plans to produce rare earth elements from its Texas assets. The company aims to begin operations at its manufacturing facility by the first half of 2026.
Rare earth magnets, made from alloys of these elements, are vital components in a range of products, from defense systems to electric vehicles and smartphones.
Notably, the U.S. Geological Survey reports that approximately 70% of the rare earth elements imported by the U.S. come from China.
For those considering investing in USA Rare Earth, it’s important to manage expectations.
The company remains in the pre-revenue stage, which carries significant risks. Therefore, only investors with a high tolerance for risk should contemplate buying shares at this time.
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