MP Materials: Shorts Sitting Tight as Borrow Dries Up Before Earnings

MP Materials heads into its November 5 earnings report with one of the tightest short positions in the market, a 9% single-day price surge, and a borrow market so dry it has run at zero availability for weeks.

The stock jumped 9.1% on October 27 to close at $40.87, adding to a 4.7% gain on the week. That rebound matters in context: the shares are still down 16% over the past month, so Tuesday's move is a partial recovery rather than a breakout. Peers moved sharply too. CRML gained 27% on the day and 27% on the week. NB added 17.6% on Tuesday and 12.5% on the week. USAR rose 16.7%. The critical minerals space broadly caught a bid, and MP joined it, though the stock has underperformed many of its closest peers over longer windows.

Short positioning here is extreme and has not broken. SI is running at 20.6% of the free float, 36.5 million shares as of October 27, down about 4.4% on the week after peaking near 38.8 million shares on October 23. The modest weekly retreat does not change the overall picture: this has been one of the most heavily shorted names in the market for months, and the ORTEX short score of 75.84 ranks it in the 1st percentile of all stocks on short positioning. Days-to-cover from the FINRA settlement figure stands at 6.2 days, meaning at current trading volumes it would take more than a week to unwind the entire short book. What makes the setup more charged is that borrow availability has collapsed to zero. Every share in the lending pool is currently out on loan. That has been the case almost continuously since late September, the single day with any meaningful availability was September 16, when it sat at 9.5% before disappearing. Cost to borrow is relatively modest at 1.38%, up 3% on the week and 6% over the month, but low CTB combined with zero availability is a common setup when shorts got in early and simply have not moved. There is no squeeze from financing cost, but there is also no room for new shorts to enter the borrow market. Options sentiment is calm: the put/call ratio at 0.53 sits just above its 20-day average and well below the 52-week high of 1.01, meaning the options market is not adding defensively to the shorts already in the stock.

The Street remains constructive despite a month of target cuts. The consensus mean target is $70.94, against a current price of $40.87, implying significant implied upside on paper. Morgan Stanley trimmed its target to $66 on October 7, maintaining Overweight, and Baird cut to $65 from $80 on October 1, also keeping Outperform. Those reductions reflect the stock's 16% pullback rather than a change in fundamental view. The bull case, as laid out in the most recent analyst commentary, centres on Mountain Pass as the only scaled North American rare earth operation, NdPr oxide production up 41% year-on-year in Q2, and a balance sheet carrying roughly $1.5bn in cash. The bear case is equally concrete: more than 80% of product revenue runs through Shenghe, NdPr prices are volatile, and Stage II and Stage III commissioning carry real execution risk. The EP factor score of 25 on 30-day momentum and the PE multiple of 63.9x both signal the market is not paying for near-term earnings; it is paying for the optionality on vertical integration and geopolitical scarcity value. EPS surprise ranks in the 99th percentile, a company that has consistently beaten on the quarter even when the stock has moved against it.

Two facts from Mine Safety and Health Administration data add texture to the operational picture. Employee hours worked at Mountain Pass logged the largest Q2 on record going back to 2018, at 409,335 hours in the April period. Average employees have also risen for four consecutive quarters, now at 737. Neither of these datasets has been measured as a leading indicator of MP's reported financials, so they are colour on ramp-up pace rather than a read on the November print. Retail attention, measured by Wikipedia page views, is running at a z-score of 2.1 relative to the prior 90 days as of October 22, the highest in the recent window, consistent with Tuesday's sharp move attracting renewed retail interest.

The ownership register carries one activation worth noting. Chairman and CEO James Litinsky filed a Schedule 13D/A in January 2026 disclosing a reduction in his stake from 9.0% to 7.3%. That filing carries activist-level 13D status, meaning his position is formally on the activist register. His most recent open-market trade on record was a pair of sales in early June at prices of $68 to $70, well above current levels. The COO, Michael Rosenthal, bought 10,000 shares in the open market in early June at $54.30, the only discretionary purchase from a named executive in the recent window. On the institutional side, BlackRock filed a fresh 13G/A on October 27, disclosing an 8% stake, up from 6.7% previously, adding roughly 699,000 shares as of the latest filing. Stakes on the 13D/G register are as-last-disclosed around the 5% threshold and holders can fall below without filing again.

With earnings on November 5, the question is how 20.6% short interest and zero borrow availability interact with whatever the company reports: the last print, in August, moved the stock 6.7% on the day and 16.2% over the following five sessions.