Post Content
USA Rare Earth Inc. (NASDAQ:USAR) is one of the 10 Stock Market Casualties You Can’t Ignore Today.
USA Rare Earth fell for a third straight session on Friday, shedding 8.82 percent to close at $16.24 apiece, as investors unloaded portfolios amid brewing tensions in the House of Representatives in relation to the government’s $1.58 billion investment into the listed firm.
In a 10-page letter on Thursday, Representative Zoe Lofgren accused Commerce Secretary Howard Lutnick of structuring the government’s investment into USA Rare Earth Inc. (NASDAQ:USAR), saying that even if the government decides not to pursue a stake in the company, the listed firm would remain reliant on a billion-dollar PIPE financing from Cantor Fitzgerald, which his family currently owns.
USA Rare Earth Inc. (NASDAQ:USAR) announced in January this year that it secured $3.1 billion worth of financing commitments from both the government and the private sector, $1.5 billion of which came from PIPE financing.
Christian Lagerek/Shutterstock.com
While the secretary has already divested his entire ownership in Cantor Fitzgerald upon joining the Cabinet, it is still being run by his sons.
“This deal creates a massive personal conflict by granting the Secretary of Commerce overwhelming leverage to influence the behavior of a private company while positioning him to promote the interests of his sons as a condition of his support,” Lofgren said.
Both USA Rare Earth Inc. (NASDAQ:USAR) and the Commerce Department have yet to release a comment regarding the issue.
While we acknowledge the potential of USAR as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.
READ NEXT: 33 Stocks That Should Double in 3 Years and 15 Stocks That Will Make You Rich in 10 Years.
Disclosure: None. Follow Insider Monkey on Google News.