Here's Why Shares in USA Rare Earth Slumped 23% in June
A combination of three unrelated events sent the rare earth stock lower in June.
Overview
Shares in USA Rare Earth (NASDAQ: USAR) fell by 23% in June, according to data from S&P Global Market Intelligence. There are probably three unrelated reasons for the stock's decline this month. The first relates to a filing with the Securities and Exchange Commission (SEC) that might concern investors worried about a potential flood of selling by investors who had acquired their stock at lower levels. The second concerns the blacklisting of the company as part of China's export controls, and the third is a legal matter.
On June 5th, the company filed an S-3/A registration statement with the SEC covering the potential resale of 93,822,662 shares, representing 35.2% of the company's issued and outstanding common stock on a diluted basis.
Details
The selling stockholders include shares acquired at much lower prices than the current stock price via business combinations, the conversion of preferred stock and warrants, share purchase agreements, and private investment in public equity (PIPE) transactions.
Source
Originally published at www.fool.com.