USA Rare Earth Announces Share Sale to Fund Acquisition. Why the Stock Is Rising.

Rare earth magnets end up in everything from EVs to F-35 jets. The U.S. aims to break China’s dominance in the rare earths space. (Courtesy USA Rare Earth)

USA Rare Earth stock rose Monday, but came off sharply higher premarket gains, after the company announced a deal to acquire privately held Less Common Metals.

Shares of the miner, which is developing the Round Top Mountain rare earth mine in Texas, rose 1.2% to $17.54. They traded as high as $19.01 before sliding back to as low as $16.88. The S&P 500 and Dow Jones Industrial Average rose 0.3% and 0.2%, respectively.

USA Rare Earth will pay $100 million in cash and 6.74 million of its own shares to acquire LCM, a U.K.-based manufacturer of specialized rare earth metals and alloys. The purchase is part of USA Rare Earth’s strategy to upgrade mined material into finished products.

“The acquisition of LCM is a bold and transformative leap forward for our Company and the domestic rare earth industry,” said USA Rare Earth chairman Michael Blitzer in a statement. “Midstream metal making is the linchpin of the global supply chain, and LCM is the only proven ex-China producer of rare earth metal, alloys, and strip casting at scale.”

Midstream refers to intermediate products between the mine and finished goods, such as rare earth magnets that end up in things such as electric motors. LCM will provide material for USA Rare Earth’s planned magnet facility in Stillwater, Oklahoma.

In addition to the deal, USA Rare Earth announced a $125 million common equity investment from an existing shareholder at $15.00 a share. The company also named a new CEO.

Barbara Humpton will succeed Josh Ballard as chief executive on Oct. 1. Humpton most recently served as President and CEO of Siemens USA. Ballard had been CEO of USA Rare Earth for less than a year. He came from outside the company.

While trading has settled down, the initial stock price pop was a surprise. Selling stock to fund an acquisition and selling stock below where shares closed Friday doesn’t always result in share price bumps. Investors, however, are positive about the outlook for rare earth materials these days. Coming into Monday, USA Rare Earth stock has risen 191% over the past six months.

China dominates the market for rare earth products with an estimated 85% of global refining capacity. It threatened rare earth export restrictions as trade tensions escalated with the U.S. earlier in 2025. That, along with prior threats, accelerated plans by the Department of Defense to establish a domestic rare earth supply chain. In July, the DOD invested in MP Materials , sending its shares up 108% over the past three months, heading into Monday trading.

The MP deal helped shares of other rare earth companies, including USA Rare Earth.

Write to Al Root at allen.root@dowjones.com