MP Materials (NYSE:MP) stock is taking a beating on Thursday thanks to a new short report calling out the electric vehicle (EV) play.
Let’s dive into that report below with all the details potential holders of MP stock need to know.
- Bonitas Research is behind the short report hitting the company’s stock today.
- The firm claims that MP Materials value has been inflated by Shenghe Resources.
- This is a publicly-traded company in China that owns an 8% stake in MP Materials.
- The report also claims it’s the 100% customer of MP Materials, as well as having 100% right to production and 100% of the company’s net income until it recouped its investment in the company.
- According to the short report, Shenghe Resources enacted an abusive transfer price manipulation scheme.
- The report says this started in the second quarter of 2021.
- It claims that this saw it overpaying for MP Materials concentrates in an effort to boost the company’s profits.
- As a result, Shenghe Resources saw its profits fall while MP Materials saw its profit soar.
- To go along with that, insiders at the company unloaded $400 million of MP stock during 2021.
- Bonitas Research also points out that the scheme coincided with the SPAC insider lock-up expiration for MP stock.
- It says this allowed MP shareholders sell their stocks at inflated prices.
- Bonitas Research says that it’s short MP stock and expects it to head lower.
- Investors are reacting to the news today with heavy trading of the shares.
- As of this writing, more than 4 million shares of MP stock have been traded.
- That’s above the company’s daily average trading volume of 2.6 million shares.
MP stock is down 12.2% as of Thursday morning.
Investors can find more recent stock market news below!
We’ve got all the latest stock talk traders need to know about for Thursday! Among that is SOC Telemed (NASDAQ:TLMD) stock soaring on acquisition news, what’s hitting Nokia (NYSE:NOK) stock today, as well as this morning’s biggest pre-market stock movers. You can find all of this news at the links below!
More Thursday Stock Market News
- TLMD Stock: The Buyout Deal That Has SOC Telemed Skyrocketing 320% Today
- Nokia Stock Alert: Why Are NOK Shares Down Despite Dividend, Buyback News?
- Today’s Biggest Pre-Market Stock Movers: 10 Top Gainers and Losers on Thursday
On the date of publication, William White did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.