MP Materials Announces Proposed Offering of Convertible Notes - Seite 2

In connection with establishing their initial hedges of the capped call transactions, the capped call counterparties have advised MP Materials that they or their respective affiliates expect to enter into various derivative transactions with respect to the common stock concurrently with, or shortly after, the pricing of the notes, and may unwind these various derivative transactions and purchase our common stock in open market transactions shortly after the pricing of the notes. This activity could increase (or reduce the size of any decrease in) the market price of the common stock or the notes at that time.

In addition, the capped call counterparties or their respective affiliates may modify their hedge positions by entering into or unwinding various derivatives with respect to the common stock and/or purchasing or selling the common stock or other of MP Materials’ securities in secondary market transactions following the pricing of the notes and prior to the maturity of the notes (and are likely to do so during any observation period related to a conversion of a note). This activity could also cause or avoid an increase or a decrease in the market price of the common stock or the notes, which could affect noteholders’ ability to convert the notes and, to the extent the activity occurs during any observation period related to a conversion of the notes, it could affect the number of shares and value of the consideration that noteholders will receive upon conversion of the notes.

Concurrently with the offering, the Company expects to enter into one or more separate and individually negotiated transactions with one or more holders of the 2026 notes to repurchase for cash a portion of the 2026 notes on terms to be negotiated with each holder (the “note repurchases”). The Company expects that holders of the 2026 notes that sell their 2026 notes to the Company in any note repurchase transaction may enter into or unwind various derivatives with respect to the common stock and/or purchase or sell shares of the common stock in the market to hedge their exposure in connection with these transactions. In particular, the Company expects that many holders of the 2026 notes employ a convertible arbitrage strategy with respect to the 2026 notes and have a short position with respect to the common stock that they would close, through purchases of the common stock and/or the entry into or unwind of economically equivalent derivatives transactions with respect to the common stock, in connection with the Company’s repurchase of its 2026 notes for cash. This activity could increase (or reduce the size of any decrease in) the market price of the common stock or the notes at that time and could result in a higher effective conversion price for the notes.