Grizzly Research Falls Short in Hit Piece Targeting MP Materials

Posted on October 27, 2021 by Scott Shuda

Yesterday, Grizzly Research issued a glossy 27-page report entitled, “Rare Earth Shenanigans in Chamath Backed Company Will Likely Cost Investors Dearly.” A strong signal in evaluating the firm’s strategy with the report, is its call to celebrity, highlighting the name of Chamath Palihapitiya, the so called “King of SPACs,” who has been a recent leader in developing SPACs, and a regular investor with deals including Virgin Galactic, Opendoor, and Clover Health. Maybe, Grizzly believed it could darken the name of MP Materials by associating the company with a billionaire investor, but more likely it thought referencing the emerging celebrity in the report’s title would draw attention.

No doubt the Grizzly Report did draw some attention. The stock which had been on a near straight-line run from $30 to $38 in advance of earnings, gave half of that gain back on higher than normal volume.

Chart from Yahoo Finance

As seen above the chart, the stock is trading up on in the “day after” premarket.

Out this morning is a new 10-Minute Podcast featuring Breakout Investor, Matt Rakowski. In this 33rd episode of the popular podcast, Rakowski goes through the Grizzley report, section by section, disputing its assertions and supporting arguments. Perhaps the biggest surprise is Grizzley’s failing to mention that a key part of the company’s strategy has always been to retrofit an existing facility and start processing its own rare earths concentrate in 2022. That, and a glaring failure to note significant changes in the neodymium market over the last 10 years, relating to vast increases in demand due to rising electric vehicle and wind turbine adoption.

In addition to the podcast, Breakout Investors have been busy discussing the short report and MP Materials business on the Breakout Investor Platform. After a simple registration, most of the content on the Breakout Investor Platform is free. Join us for discussion on MP Materials and other investment ideas.

Disclosure: I am long MP Materials (MP) and might buy or sell securities at any time.

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