Sam Boughedda

Investing.com — Mp Materials Corp (NYSE:) Stocks plunged more than 13% after short-seller Grizzly Research claimed it saw a possible 60% downside to the stock.

MP Materials was publicly incorporated in November 2020 after a reverse SPAC merge.

Grizzly said that the stock was a poor deal and would cost dearly to investors. Grizzly claims that the Chinese government can trace the company back, despite it being called “the largest western rare earth producer.”

MP Materials responded in several tweets Tuesday afternoon. “Grizzly’s “report” gets the facts & analysis wrong and displays a fundamental misunderstanding of our business, industry & performance,” said the first tweet.

“We take great pride in communicating clearly & transparently with stakeholders through our public filings & communications. It’s disappointing to see entities misrepresent and sensationalize aspects of our business,” MP said in another tweet.

Grizzly stated, “We discovered that Shenghe is a related party which accounts for 99% $MP revenue and a substantial shareholder can be traced back the Chinese central government. This is a potential national security risk that has not been addressed,” tweeted Grizzly.

“The idea $MP could be a viable competitor for Chinese producers appears like a complete charade considering that the Chinese Treasury Department controls its biggest client, and largest shareholder,” Grizzly said.

Tyler Langton from JPMorgan said that before the brief report was published, he saw “positive tailwinds for MP Materials” ahead of JPMorgan’s Q3 earnings report in November 4.

According to the analyst, he anticipates strong earnings and no surprises. The shares were given an overweight rating with a target price of $45 by him.