81-638: The Mountain Pass Rare Earth Mine and Processing Facility, owned by MP Materials , is an open-pit mine of rare-earth elements on the south flank of the Clark Mountain Range in California, 53 miles (85 km) southwest of Las Vegas, Nevada . In 2020 the mine supplied 15.8% of the world's rare-earth production. It is the only rare-earth mining and processing facility in the United States. It
162-499: A cerium concentrate, which was the insoluble residue left after the calcined bastnäsite had been leached with hydrochloric acid . The lanthanides that dissolve as a result of the acid treatment are subjected to solvent extraction to capture the europium and purify the other individual components of the ore. A further product includes a lanthanide mix, depleted of much of the cerium, and essentially all of samarium and heavier lanthanides. The calcination of bastnäsite drives off
243-562: A 5.8% stake in Lynas. Discovered in 1949 in San Bernardino County , California , Mountain Pass mine consists of a bastnäsite ore-body with significant concentrations of rare earth elements. The mine once supplied most of the world's rare earth elements. Mountain Pass is the only operational rare earth mining and processing facility in the United States. The expected Mountain Pass mine life
324-568: A better result. In addition to the extensive international evidence that auctions have not been popular for IPOs, there is no U.S. evidence to indicate that the Dutch auction fares any better than the traditional IPO in an unwelcoming market environment. A Dutch auction IPO by WhiteGlove Health, Inc., announced in May 2011 was postponed in September of that year, after several failed attempts to price. An article in
405-432: A cleanup plan and completing an extensive environmental study, Unocal in 2004 won approval of a county permit that allowed the mine to operate for another 30 years. The mine passed a key county inspection in 2007. Since 2007, China has restricted exports of REEs (rare-earth elements) and imposed export tariffs, both to conserve resources and to give preference to Chinese manufacturers. In 2009, China supplied more than 96% of
486-455: A company is listed, it is able to issue additional common shares in a number of different ways, one of which is the follow-on offering . This method provides capital for various corporate purposes through the issuance of equity (see stock dilution ) without incurring any debt. This ability to quickly raise potentially large amounts of capital from the marketplace is a key reason many companies seek to go public. An IPO accords several benefits to
567-421: A firm's stock of patents mitigates this effect. A Dutch auction allows shares of an initial public offering to be allocated based only on price aggressiveness, with all successful bidders paying the same price per share. One version of the Dutch auction is OpenIPO , which is based on an auction system designed by economist William Vickrey . This auction method ranks bids from highest to lowest, then accepts
648-448: A government effort to increase domestic production of rare earth materials. On September 30, 2020, President Donald Trump issued an executive order targeting China's dominance of rare earth materials. In the executive order, he expressed concern for the heavy reliance of the US on China for 80 percent of rare earth materials. He reiterated the importance of producing and refining rare earth in
729-461: A new commercial facility for “heavy” rare earth mineral processing. On May 24, 2024, the Biden Administration announced a 25 percent tariff on rare earth magnets from China, set to take effect in 2026. This marks the first time that critical minerals, including rare earth magnets, have been specifically included in the tariffs. Following the tariffs MP Materials put out a statement listing
810-515: A new factory located in Fort Worth , Texas to produce the magnets. As of December 2021, JHL Capital Group, QVT Financial, and CEO James Litinsky were the company's three largest shareholders, and about 7.7% of the company was owned by Shenghe Resources. Apart from institutions, other investors own 18%. MP Materials and Australia's Lynas held a confidential discussion regarding a potential merger which fell through on February 5, 2024. Lynas
891-400: A plan for restricting U.S. access to Chinese heavy rare earth elements, should the punitive step be deemed necessary. In 2022, the company announced that it had secured Department of Defense grants to support both light rare-earth elements (LREEs) and heavy rare earth elements (HREEs). The facility plans to begin separating NdPr oxide in early 2023. MP Materials MP Materials Corp.
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#1733086304463972-461: A preliminary prospectus, known as a red herring prospectus , during the initial quiet period. The red herring prospectus is so named because of a bold red warning statement printed on its front cover. The warning states that the offering information is incomplete, and may be changed. The actual wording can vary, although most roughly follow the format exhibited on the Facebook IPO red herring. During
1053-479: A press conference that the United States Department of Defense was investing $ 35 million into MP Materials as part of an effort to spur domestic rare earth production in the United States. Biden said that this move was designed to reduce America's reliance on rare earth minerals imported from other countries. The Biden administration said the federal funding is earmarked to assist the company to develop
1134-497: A rare earth material used in high-strength permanent magnets that power the traction motors found in electric vehicles , robotics , wind turbines , drones and other advanced motion technologies. MP Materials is listed on the New York Stock Exchange under the ticker symbol "MP". As of December 2021, JHL Capital Group, QVT Financial and CEO James Litinsky were the company's three largest shareholders, with about 7.7% of
1215-504: A territorial dispute. Because Japan and China are the only current sources for rare-earth magnetic material used in the US, a permanent disruption of Chinese rare-earth supply to Japan would leave China as the sole source. Jeff Green, a rare-earth lobbyist, said, "We are going to be 100 percent reliant on the Chinese to make the components for the defense supply chain." The House Committee on Science and Technology scheduled on September 23, 2010,
1296-522: A toxic waste spill and wasn't reopened due to competition from Chinese suppliers, though processing of previously mined ore continued. In 2008, Chevron sold the mine to privately-held Molycorp Minerals LLC, a company formed to revive the Mountain Pass mine. Molycorp announced plans to spend $ 500 million to reopen and expand the mine, and on July 29, 2010, it raised about $ 400 million through an initial public offering , selling 28,125,000 shares at $ 14 under
1377-484: Is theglobe.com IPO which helped fuel the IPO "mania" of the late 1990s internet era. Underwritten by Bear Stearns on 13 November 1998, the IPO was priced at $ 9 per share. The share price quickly increased 1,000% on the opening day of trading, to a high of $ 97. Selling pressure from institutional flipping eventually drove the stock back down, and it closed the day at $ 63. Although the company did raise about $ 30 million from
1458-453: Is about 200 ft (61 m) thick and 2,300 ft (700 m) long. To process bastnäsite ore, it is finely ground and subjected to froth flotation to separate the bulk of the bastnäsite from the accompanying barite , calcite , and dolomite . Marketable products include each of the major intermediates of the ore dressing process: flotation concentrate, acid-washed flotation concentrate, calcined acid-washed bastnäsite, and finally
1539-651: Is an American rare-earth materials company headquartered in Las Vegas , Nevada . MP Materials owns and operates the Mountain Pass mine , the only operating rare earth mine and processing facility in the United States . The rare earth materials industry is dominated by China, which produces 60% of the world's rare earth elements and processes 90% of these materials, including imports from other countries. MP Materials focuses its production on Neodymium - Praseodymium (NdPr),
1620-539: Is an expensive process, IPOs also typically involve one or more law firms with major practices in securities law , such as the Magic Circle firms of London and the white-shoe firms of New York City. Financial historians Richard Sylla and Robert E. Wright have shown that before 1860 most early U.S. corporations sold shares in themselves directly to the public without the aid of intermediaries like investment banks. The direct public offering (DPO), as they term it,
1701-421: Is approximately 24 years. MP Materials produced 28,000 tonnes of rare-earth oxide equivalent from Mountain Pass in 2019, and 38,500 tonnes in 2020, or more than 15% of global production. As of late 2020, Shenghe Resources was the sole purchaser of MP Material's rare earth concentrate. As of 2023, MP Materials had a three-stage plan for scaling its operations: As of 2023, stages II and III were underway and
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#17330863044631782-451: Is low enough to stimulate interest in the stock but high enough to raise an adequate amount of capital for the company. When pricing an IPO, underwriters use a variety of key performance indicators and non-GAAP measures. The process of determining an optimal price usually involves the underwriters ("syndicate") arranging share purchase commitments from leading institutional investors. Some researchers (Friesen & Swift, 2009) believe that
1863-417: Is possible that the financial incentives of the advisor and client may not be aligned. The issuer usually allows the underwriters an option to increase the size of the offering by up to 15% under a specific circumstance known as the greenshoe or overallotment option. This option is always exercised when the offering is considered a "hot" issue, by virtue of being oversubscribed. In the US, clients are given
1944-509: Is the largest single known deposit of such minerals. As of 2022, work is ongoing to restore processing capabilities for domestic light rare-earth elements (LREEs) and work has been funded by the United States Department of Defense to restore processing capabilities for heavy rare-earth metals (HREEs) to alleviate supply chain risk. The Mountain Pass deposit is in a 1.4 billion-year-old Precambrian carbonatite intruded into gneiss . It contains 8% to 12% rare-earth oxides, mostly contained in
2025-458: Is the second largest rare earth material company outside of China. As of 2024, CEO James Litinsky was the company's largest shareholder. Other large shareholders include Vanguard, Shenghe Resources, BlackRock and Hancock Prospecting. In April 2024, Hancock Prospecting , an Australian mining firm owned by Gina Rinehart, disclosed a 5.3% stake in MP Materials, comprising 8.8 million shares, and
2106-399: Is to generate additional interest in the stock and a rapid rise in share price when it first becomes publicly traded (known as an "IPO pop"). Flipping , or quickly selling shares for a profit , can lead to significant gains for investors who were allocated shares of the IPO at the offering price. However, underpricing an IPO results in lost potential capital for the issuer. One extreme example
2187-452: Is usually underwritten by a " syndicate " of investment banks, the largest of which take the position of "lead underwriter". Upon selling the shares, the underwriters retain a portion of the proceeds as their fee. This fee is called an underwriting spread . The spread is calculated as a discount from the price of the shares sold (called the gross spread ). Components of an underwriting spread in an initial public offering (IPO) typically include
2268-403: The carbon dioxide content, leaving an oxide - fluoride , in which the cerium content oxidizes to the less- basic quadrivalent state. However, the high temperature of the calcination gives less-reactive oxide, and the use of hydrochloric acid , which can cause reduction of quadrivalent cerium, leads to an incomplete separation of cerium and the trivalent lanthanides. Gold mining began at
2349-498: The publicani were legal bodies independent of their members whose ownership was divided into shares, or partes . There is evidence that these shares were sold to public investors and traded in a type of over-the-counter market in the Forum , near the Temple of Castor and Pollux . The shares fluctuated in value, encouraging the activity of speculators, or quaestors . Mere evidence remains of
2430-507: The Dutch auction is still a little used method in U.S. public offerings, although there have been hundreds of auction IPOs in other countries. In determining the success or failure of a Dutch auction, one must consider competing objectives. If the objective is to reduce risk, a traditional IPO may be more effective because the underwriter manages the process, rather than leaving the outcome in part to random chance in terms of who chooses to bid or what strategy each bidder chooses to follow. From
2511-407: The Dutch auction system for its initial public offering. Traditional U.S. investment banks have shown resistance to the idea of using an auction process to engage in public securities offerings. The auction method allows for equal access to the allocation of shares and eliminates the favorable treatment accorded important clients by the underwriters in conventional IPOs. In the face of this resistance,
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2592-470: The IPO are restricted from issuing any earnings forecasts or research reports for the company. When the quiet period is over, generally the underwriters will initiate research coverage on the firm. A three-day waiting period exists for any member that has acted as a manager or co-manager in a secondary offering. Not all IPOs are eligible for delivery settlement through the DTC system , which would then either require
2673-509: The IPO, shares are traded freely in the open market at what is known as the free float. Stock exchanges stipulate a minimum free float both in absolute terms (the total value as determined by the share price multiplied by the number of shares sold to the public) and as a proportion of the total share capital (i.e., the number of shares sold to the public divided by the total shares outstanding). Although IPO offers many benefits, there are also significant costs involved, chiefly those associated with
2754-492: The US and discussed various tariffs and government grants to rare earth material companies such as MP Materials. In 2021, MP Materials received $ 3 million in funding from the United States Department of Energy to design and study the feasibility of a system to produce rare earth oxides and metals from coal by-products in collaboration with the University of Kentucky. In February 2022, U.S. President Joe Biden announced at
2835-495: The Wall Street Journal cited the reasons as "broader stock-market volatility and uncertainty about the global economy have made investors wary of investing in new stocks". Under American securities law, there are two-time windows commonly referred to as "quiet periods" during an IPO's history. The first and the one linked above is the period of time following the filing of the company's S-1 but before SEC staff declare
2916-464: The amount of $ US 1.4 billion. The company's shares were removed from the NYSE. In August 2015, it was reported that the mine was to be shut down. On August 31, 2016, Molycorp Inc. emerged from bankruptcy as Neo Performance Materials, leaving behind the mine as Molycorp Minerals LLC in its own separate Chapter 11 bankruptcy. As of January 2016, its shares were traded OTC under the symbol MCPIQ. Mountain Pass
2997-408: The assumption of independent private values (that the value of IPO shares to each bidder is entirely independent of their value to others, even though the shares will shortly be traded on the aftermarket). Theory that incorporates assumptions more appropriate to IPOs does not find that sealed bid auctions are an effective form of price discovery, although possibly some modified form of auction might give
3078-422: The capital to its public investors. Those investors must endure the unpredictable nature of the open market to price and trade their shares. After the IPO, when shares are traded in the market, money passes between public investors. For early private investors who choose to sell shares as part of the IPO process, the IPO represents an opportunity to monetize their investment. After the IPO, once shares are traded in
3159-407: The company (primary offering) as well as to any early private investors who opt to sell all or a portion of their holdings (secondary offerings) as part of the larger IPO. An IPO, therefore, allows a company to tap into a wide pool of potential investors to provide itself with capital for future growth, repayment of the debt, or working capital. A company selling common shares is never required to repay
3240-547: The company had begun production of refined rare earths. MP Materials signed a supply chain agreement with Japanese trading house Sumitomo Corporation in 2023. In July 2020, the United States Department of Defense issued a preliminary contract to MP Materials intended to restore domestic heavy rare earth production and separation capabilities to the United States. In November 2020, the United States Department of Defense awarded MP Materials $ 9.6 million as part of
3321-426: The company owned by Shenghe Resources , a Chinese company partly owned by the country's Ministry of Natural Resources . In 2015, Molycorp , the previous owners of the Mountain Pass mine , filed for bankruptcy. At the time, it was the only U.S. producer of rare earth elements. While in bankruptcy, Secure Natural Resources (SNR), a company owned by Molycorp's creditors, including JHL Capital Group, gained control of
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3402-442: The concession, while the member of the syndicate who provided the shares to that broker-dealer would retain the underwriting fee. Usually, the managing/lead underwriter, also known as the bookrunner , typically the underwriter selling the largest proportions of the IPO, takes the highest portion of the gross spread , up to 8% in some cases. Multinational IPOs may have many syndicates to deal with differing legal requirements in both
3483-448: The final IPO prospectus is for the issuer to retain one of the major financial "printers", who print (and today, also electronically file with the SEC ) the registration statement on Form S-1. Typically, preparation of the final prospectus is actually performed at the printer, wherein one of their multiple conference rooms the issuer, issuer's counsel (attorneys), underwriter's counsel (attorneys),
3564-468: The following (on a per-share basis): Manager's fee, Underwriting fee—earned by members of the syndicate, and the Concession—earned by the broker-dealer selling the shares. The Manager would be entitled to the entire underwriting spread. A member of the syndicate is entitled to the underwriting fee and the concession. A broker-dealer who is not a member of the syndicate but sells shares would receive only
3645-421: The highest bids that allow all shares to be sold, with all winning bidders paying the same price. It is similar to the model used to auction Treasury bills , notes, and bonds since the 1990s. Before this, Treasury bills were auctioned through a discriminatory or pay-what-you-bid auction, in which the various winning bidders each paid the price (or yield) they bid, and thus the various winning bidders did not all pay
3726-458: The issued shares, the stock may fall in value on the first day of trading. If so, the stock may lose its marketability and hence even more of its value. This could result in losses for investors, many of whom being the most favored clients of the underwriters. Perhaps the best-known example of this is the Facebook IPO in 2012. Underwriters, therefore, take many factors into consideration when pricing an IPO, and attempt to reach an offering price that
3807-425: The issuer's domestic market and other regions. For example, an issuer based in the E.U. may be represented by the major selling syndicate in its domestic market, Europe, in addition to separate group corporations or selling them for US/Canada and Asia. Usually, the lead underwriter in the head selling group is also the lead bank in the other selling groups. Because of the wide array of legal requirements and because it
3888-654: The lead underwriter(s), and the issuer's accountants/auditors make final edits and proofreading, concluding with the filing of the final prospectus by the financial printer with the Securities and Exchange Commission. Before legal actions initiated by New York Attorney General Eliot Spitzer , which later became known as the Global Settlement enforcement agreement, some large investment firms had initiated favorable research coverage of companies in an effort to aid corporate finance departments and retail divisions engaged in
3969-426: The listing regime. Planning is crucial to a successful IPO. One book suggests the following seven planning steps: IPOs generally involve one or more investment banks known as " underwriters ". The company offering its shares, called the "issuer", enters into a contract with a lead underwriter to sell its shares to the public. The underwriter then approaches investors with offers to sell those shares. A large IPO
4050-520: The marketing of new issues. The central issue in that enforcement agreement had been judged in court previously. It involved the conflict of interest between the investment banking and analysis departments of ten of the largest investment firms in the United States. The investment firms involved in the settlement had all engaged in actions and practices that had allowed the inappropriate influence of their research analysts by their investment bankers seeking lucrative fees. A typical violation addressed by
4131-429: The mine supplied most of the worldwide rare-earth metals consumption. Molybdenum Corporation of America changed its name to Molycorp in 1974. The corporation was acquired by Union Oil in 1977, which in turn became part of Chevron Corporation in 2005. In 1998, the mine's separation plant ceased production of refined rare-earth compounds; it continued to produce bastnäsite concentrate. The mine closed in 2002 after
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#17330863044634212-416: The mine's mineral rights. In June 2017, the Mountain Pass mine was purchased at auction for $ 20.5 million by a new entity called MP Mine Operations LLC (MPMO). MPMO was a consortium formed principally by JHL Capital Group, a Chicago-based investment firm led by James Litinsky, along with QVT Financial LP and Shenghe Resources. Shenghe Resources held a minority, non-voting interest. At the time, Mountain Pass
4293-474: The mineral bastnäsite . Gangue minerals include calcite , barite , and dolomite . It is regarded as a world-class rare-earth mineral deposit. The metals that can be extracted from it include: cerium , lanthanum , neodymium , and europium . At 1 July 2020, Proven and Probable Reserves , using a 3.83% total rare-earth oxide (REO) cutoff grade, were 18.9 million tonnes of ore containing 1.36 million tonnes of REO at an average grade of 7.06% REO. The ore body
4374-616: The name MP Materials Corp. The transaction, which closed on November 17, 2020, raised $ 545 million. On November 18, 2020, MP Materials began trading on the New York Stock Exchange under the symbol "MP". In December 2021, MP Materials signed a long-term agreement with General Motors to provide neodymium-iron-boron magnets for use in GM's electric vehicle motors. As part of the contract, MP Materials also agreed to provide alloy and finished magnets to GM for its electric vehicles and to open
4455-427: The offering, it is estimated that with the level of demand for the offering and the volume of trading that took place they might have left upwards of $ 200 million on the table. The danger of overpricing is also an important consideration. If a stock is offered to the public at a higher price than the market will pay, the underwriters may have trouble meeting their commitments to sell shares. Even if they sell all of
4536-405: The open market, investors holding large blocks of shares can either sell those shares piecemeal in the open market or sell a large block of shares directly to the public, at a fixed price , through a secondary market offering . This type of offering is not dilutive since no new shares are being created. Stock prices can change dramatically during a company's first days in the public market. Once
4617-401: The physical delivery of the stock certificates to the clearing agent bank's custodian or a delivery versus payment (DVP) arrangement with the selling group firm. "Stag profit" is a situation in the stock market before and immediately after a company's initial public offering (or any new issue of shares). A "stag" is a party or individual who subscribes to the new issue expecting the price of
4698-404: The pipeline and chemical processing at the mine were shut down. In all, about 600,000 gallons of radioactive and other hazardous waste flowed onto the desert floor, according to federal authorities. By the end of the 1990s, Unocal was served with a cleanup order and a San Bernardino County district attorney's lawsuit. The company paid more than $ 1.4 million in fines and settlements. After preparing
4779-653: The previously private company: There are several disadvantages to completing an initial public offering: IPO procedures are governed by different laws in different countries. In the United States, IPOs are regulated by the United States Securities and Exchange Commission under the Securities Act of 1933 . In the United Kingdom, the UK Listing Authority reviews and approves prospectuses and operates
4860-536: The prices for which partes were sold, the nature of initial public offerings, or a description of stock market behavior. Publicani lost favor with the fall of the Republic and the rise of the Empire . In the United States, the first IPO was the public offering of Bank of North America around 1783. When a company becomes publicly listed, the money paid by the investing public for the newly issued shares goes directly to
4941-465: The process such as banking and legal fees, and the ongoing requirement to disclose important and sometimes sensitive information. Details of the proposed offering are disclosed to potential purchasers in the form of a lengthy document known as a prospectus . Most companies undertake an IPO with the assistance of an investment banking firm acting in the capacity of an underwriter. Underwriters provide several services, including help with correctly assessing
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#17330863044635022-508: The public owns 18%. In the 1980s, the company began piping wastewater up to 14 miles to evaporation ponds on or near Ivanpah Dry Lake , east of Interstate 15 near Nevada. This pipeline repeatedly ruptured during cleaning operations to remove mineral deposits called scale . The scale is radioactive because of the presence of thorium and radium , which occur naturally in the rare-earth ore. A federal investigation later found that some 60 spills—some unreported—occurred between 1984 and 1998, when
5103-512: The quiet period, the shares cannot be offered for sale. Brokers can, however, take indications of interest from their clients. At the time of the stock launch, after the Registration Statement has become effective, indications of interest can be converted to buy orders, at the discretion of the buyer. Sales can only be made through a final prospectus cleared by the Securities and Exchange Commission. The final step in preparing and filing
5184-413: The registration statement effective. During this time, issuers, company insiders, analysts, and other parties are legally restricted in their ability to discuss or promote the upcoming IPO (U.S. Securities and Exchange Commission, 2005). The other "quiet period" refers to a period of 10 calendar days following an IPO's first day of public trading. During this time, insiders and any underwriters involved in
5265-591: The review of a detailed bill to subsidize the revival of the American rare-earths industry, including the reopening of the Mountain Pass mine. After China doubled import duties on rare-earth concentrates to 25% as a result of the US-China trade war , MP Materials said, in May 2019, it will start its own partial processing operation in the United States, though full processing operations without Shenghe Resources have been delayed. According to Bloomberg, China in 2019 established
5346-549: The same price. Both discriminatory and uniform price or "Dutch" auctions have been used for IPOs in many countries, although only uniform price auctions have been used so far in the US. Large IPO auctions include Japan Tobacco, Singapore Telecom, BAA Plc and Google (ordered by size of proceeds). A variation of the Dutch auction has been used to take a number of U.S. companies public including Morningstar , Interactive Brokers Group , Overstock.com , Ravenswood Winery, Clean Energy Fuels, and Boston Beer Company . In 2004, Google used
5427-466: The settlement was the case of CSFB and Salomon Smith Barney , which were alleged to have engaged in the inappropriate spinning of "hot" IPOs and issued fraudulent research reports in violation of various sections within the Securities Exchange Act of 1934 . A company planning an IPO typically appoints a lead manager, known as a bookrunner , to help it arrive at an appropriate price at which
5508-414: The shares should be offered. There are two primary ways in which the price of an IPO can be determined. Either the company, with the help of its lead managers, fixes a price ("fixed price method"), or the price can be determined through analysis of confidential investor demand data compiled by the bookrunner (" book building "). Historically, many IPOs have been underpriced. The effect of underpricing an IPO
5589-498: The shares to be listed on one or more stock exchanges . Through this process, colloquially known as floating , or going public , a privately held company is transformed into a public company . Initial public offerings can be used to raise new equity capital for companies, to monetize the investments of private shareholders such as company founders or private equity investors, and to enable easy trading of existing holdings or future capital raising by becoming publicly traded. After
5670-399: The site in 1936, but the rare earth deposits were not discovered until 1949 when prospectors in search of uranium noticed anomalously high radioactivity. Molybdenum Corporation of America bought most of the mining claims, and began small-scale production in 1952. Production expanded greatly in the 1960s, to supply demand for europium used in color television screens. Between 1965 and 1995,
5751-419: The stock to rise immediately upon the start of trading. Thus, stag profit is the financial gain accumulated by the party or individual resulting from the value of the shares rising. This term is more popular in the United Kingdom than in the United States. In the US, such investors are usually called flippers, because they get shares in the offering and then immediately turn around " flipping " or selling them on
5832-483: The tariffs. After the announcement, CEO James Litinsky attended an event with Biden at the White House. Initial public offering An initial public offering ( IPO ) or stock launch is a public offering in which shares of a company are sold to institutional investors and usually also to retail (individual) investors. An IPO is typically underwritten by one or more investment banks , who also arrange for
5913-548: The ticker symbol MCP on the New York Stock Exchange. In December 2010, Molycorp announced that it had secured all the environmental permits needed to build a new ore processing plant at the mine; construction would begin in January 2011, and was expected to be completed by the end of 2012. On August 27, 2012, the company announced that mining had restarted. The processing plant was in full production on June 25, 2015, when Molycorp filed for Chapter 11 bankruptcy with outstanding bonds in
5994-447: The underpricing of IPOs is less a deliberate act on the part of issuers and/or underwriters, and more the result of an over-reaction on the part of investors (Friesen & Swift, 2009). One potential method for determining to underprice is through the use of IPO underpricing algorithms . Other researchers have discovered that firms with higher revenues from licensing-based technology commercialization exhibit greater IPO underpricing, while
6075-399: The underwriters. A licensed securities salesperson ( Registered Representative in the US and Canada) selling shares of a public offering to his clients is paid a portion of the selling concession (the fee paid by the issuer to the underwriter) rather than by his client. In some situations, when the IPO is not a "hot" issue (undersubscribed), and where the salesperson is the client's advisor, it
6156-517: The value of shares (share price) and establishing a public market for shares (initial sale). Alternative methods such as the Dutch auction have also been explored and applied for several IPOs. The earliest form of a company which issued public shares was the case of the publicani during the Roman Republic , although this claim is not shared by all modern scholars. Like modern joint-stock companies,
6237-405: The viewpoint of the investor, the Dutch auction allows everyone equal access. Moreover, some forms of the Dutch auction allow the underwriter to be more active in coordinating bids and even communicating general auction trends to some bidders during the bidding period. Some have also argued that a uniform price auction is more effective at price discovery , although the theory behind this is based on
6318-458: The world's REEs. Some outside China are concerned that because rare-earths are essential to some high-tech, renewable-energy, and defense-related technologies, the world should not be so reliant on a single supplier country On September 22, 2010, China quietly enacted a ban on exports of rare-earths to Japan, a move suspected to be in retaliation for the Japanese arrest of a Chinese trawler captain in
6399-525: Was acquired out of bankruptcy in July 2017 with the goal of reviving America's rare-earth industry. MP Materials resumed mining and refining operations in January 2018. MP Materials is 51.8%-owned by US hedge funds JHL Capital Group (and its CEO James Litinsky) and QVT Financial LP, while Shenghe Resources , a partially state-owned enterprise of the Government of China , holds an 8.0% stake. Apart from institutions,
6480-410: Was in a state of "care and maintenance" and had only eight employees according to Litinsky. Following the asset acquisitions and formation of the entities that became MP Materials, the company restarted operations at Mountain Pass. On July 15, 2020, the company announced a reverse takeover whereby MPMO and SNR would be merged with Fortress Value Acquisition Corporation to become a public company under
6561-513: Was not done by auction but rather at a share price set by the issuing corporation. In this sense, it is the same as the fixed price public offers that were the traditional IPO method in most non-US countries in the early 1990s. The DPO eliminated the agency problem associated with offerings intermediated by investment banks. The sale (allocation and pricing) of shares in an IPO may take several forms. Common methods include: Public offerings are sold to both institutional investors and retail clients of
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