MP Materials Corp.
| Company Name | MP Materials Corp. |
| Stock Symbol | MP |
| Class Period | May 01, 2020 to February 02, 2022 |
| Lead Plaintiff Motion Deadline | April 25, 2022 |
In November 2020, FVAC consummated a business combination with MP Mine Operations LLC and Secure Natural Resources LLC (together, “Legacy MP Materials”), and the combined entity was renamed MP Materials.
On February 3, 2022, Bonitas Research published a report alleging that MP Materials executed an “abusive transfer price manipulation scheme” with Shenghe Resources Holding Co., Ltd. (“Shenghe”), a related party. Specifically, the report alleged that Shenghe had overpaid for MP Materials concentrates to artificially inflate profits, which coincided with the lock-up expiration, allowing MP Materials insiders to sell stock at artificially inflated prices. The report also cited an academic study which concluded that MP Materials’ ore at Mountain Pass is “not economically viable to harvest for rare earth metals while 12 of the other 13 well known rare earth mines outside of China are economically feasible” at current market prices.
On this news, MP Materials’ stock fell $5.61, or 14.3%, to close at $33.75 per share on February 3, 2022, thereby injuring investors.
The complaint alleges that defendants throughout the Class Period made false and/or misleading statements and/or failed to disclose that: (1) FVAC had overstated its due diligence efforts and expertise with respect to identifying target companies to acquire; (2) FVAC performed inadequate due diligence into Legacy MP Materials prior to the Business Combination, or else ignored significant red flags regarding, among other things, Legacy MP Materials’ management, compliance policies, and Mountain Pass’s profitability; (3) as a result, the Company’s future business and financial prospects post-Business Combination were overstated; (4) MP Materials engaged in an abusive transfer price manipulation scheme with a related party in the People’s Republic of China to artificially inflate the Company’s profits; (5) MP Materials’ ore at Mountain Pass was not economically viable to harvest for rare earth metals; and (6) as a result of the foregoing, Defendants’ public statements were materially false and misleading at all relevant times.
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