STILLWATER, Okla. — June 4, 2026 (The Oklahoma Post)
There is a particular American spectacle in which a great deal of money changes hands with enormous ceremony, and the only thing conspicuously absent from the proceedings is the product. We have been devoted students of this spectacle for some time. This week it favored us with two fresh performances staged one day apart, and we would be derelict as chroniclers if we did not pause to admire the choreography before examining the receipts.
On June 2, USA Rare Earth (Nasdaq: USAR) announced a $1.2 billion magnet and metals plant in Cherokee County, South Carolina, a campus of roughly 800,000 square feet promising about 490 jobs in a state where the company has, to date, operated nothing at all. On June 3, it finalized definitive agreements with the United States Department of Commerce unlocking access to as much as $1.6 billion in federal funding and loan capacity under the CHIPS Act. The single event that did not occur during this remarkable week, the act that has declined to occur for four consecutive years, was the production and sale at commercial scale of a magnet in Stillwater, Oklahoma.
We do not raise this to wound. We raise it because the company’s own attorneys raise it, in writing, to the Securities and Exchange Commission, and we are merely the messengers who decline to avert our eyes.
The Seventeen Dollar Entry
Begin with price, because price in these affairs is where the truth prefers to hide in plain view.
Under the agreements signed June 3, USA Rare Earth will issue the Department of Commerce 16,132,790 shares of common stock and a warrant to purchase an additional 17,600,584 shares at an exercise price of $17.17 per share over a 10-year term. Depending on whether that warrant is exercised, the federal government will hold somewhere between 8 percent and 16 percent of the company. The taxpayer is now a shareholder, whether the taxpayer applied for the position or not.
Now hold that figure of $17.17 against two others. In January, the private investors who supplied the company’s $1.5 billion placement paid $21.50 per share. In the days surrounding this week’s announcement, the stock traded near $28 to $30. The government’s entry was therefore struck below what sophisticated private money paid only weeks earlier and well below what the open market was paying in real time. One might generously call that a favorable price for the public. One might also ask, as we do, why a transaction of this size was arranged at a number that dilutes every existing shareholder, and what exactly the public is receiving in exchange for the dilution it is financing.
If the price merely lifts an eyebrow, the next term lifts the entire face.
By the company’s own risk disclosures, the Department of Commerce retains its full equity stake in USA Rare Earth even if the government later declines to invest and withdraws its entire investment. Read that slowly, as we did. The government may contribute nothing, reclaim what it has already contributed, and keep the shares regardless.
We are not the first to find this curious. Representative Zoe Lofgren, the ranking member of the House Committee on Science, Space and Technology, devoted 10 pages to the arrangement in a letter to Commerce Secretary Howard Lutnick and called the provision deeply strange for a government equity deal. We will phrase it as a question instead. In what corner of ordinary commercial dealing does a party keep the equity after returning the cash, and what is the public actually buying when it buys a stake that outlives its own refund?
The Debt and the Unfilled Hole
The $1.6 billion is not cash in an envelope. It is a structure, and structures rest on assumptions.
Of the total, $277 million is direct federal funding, of which $132 million is earmarked for the rare earth mine in Sierra Blanca, Texas. The remaining $1.3 billion is senior secured loan capacity, a 15-year obligation at an expected rate of Treasury plus 150 basis points, routed through a Loan Guarantee Agreement and the Federal Financing Bank. None of it arrives at once. It is disbursed against milestones and structured to reimburse money the company has already spent, which is a courteous way of saying the company must find the money first and hope to be paid back.
Here the foundation shows its cracks. By the company’s own accounting, the full plan requires roughly $4.1 billion. Between its cash and the government’s commitment it has assembled something near $3.5 billion, which leaves about $600 million still to raise, alongside a $250 million credit facility that must be secured by Dec. 31, 2026. We are invited, in other words, to celebrate the financing of a plan that remains, by simple subtraction, unfinanced.
Public Money Has Custodians
The deal was administered through the Commerce Department’s CHIPS Program Office, housed within the National Institute of Standards and Technology, under the authority of Secretary Howard Lutnick. The company’s $1.5 billion private placement, the raise that made the federal arithmetic close, was brokered by Cantor Fitzgerald, the firm Secretary Lutnick formerly led and which is now run by his sons.
We did not conjure this concern, and we are careful to say so. Representative Lofgren wrote that the arrangement creates a massive personal conflict, granting the Secretary of Commerce overwhelming leverage over a private company while positioning him to advance the interests of his sons as a condition of his support. Senator Elizabeth Warren raised the identical conflict in a separate letter dated Feb. 25, 2026, noting that a raise brokered by the Secretary’s former firm could enrich his immediate family. Lofgren further observed that the USA Rare Earth stake is one of at least 10 such federal equity arrangements the administration has entered since July 2025, which suggests that what we are watching in Stillwater is not a single curiosity but a template.
USA Rare Earth reached the public markets not through the scrutiny of a traditional offering but through a merger with Inflection Point Acquisition Corp. II, a blank-check company. The chairman of USA Rare Earth’s board, Michael Blitzer, is also chairman and chief executive of Inflection Point, the entity that sponsored that merger and anchored the January placement. The same hand appears on more than one side of the financing the public now underwrites. We reported in 2025 on the hedge fund non-redemption agreements, the 12 percent cumulative preferred dividends and the offshore incorporation that attended the company’s birth. We note now that to accommodate the government’s arrival, the company amended those very instruments, cutting the exercise price on existing warrants to $7.00 from $12.00 and rewriting its 12 percent preferred terms so that government financing would not trip the anti-dilution protections. The machine was retooled to receive federal fuel.
The Filing That Contradicts the Press Release
We arrive at our oldest and most faithful theme, the quiet war between what this company announces and what it discloses.
The company has announced, with trumpets, the commissioning of its Stillwater line and the commencement of customer orders. Yet in its most recent filings with the Securities and Exchange Commission, the documents that carry legal consequence for being untrue, it describes the Stillwater facility as under development, not yet completed, and states that it has not commenced producing and selling magnets commercially, possessing no history in commercial operations. The Oklahoma Department of Environmental Quality confirmed to FOX 25 that inspectors visited the site this spring and found construction ongoing. We have ourselves reported on the open questions surrounding the facility’s occupancy status and on the curious spectacle of a plant described as essential to national security advertising production roles through open-call hiring events with brief interview slots and no clearance requirements. A facility cannot be both a fortress and a job fair, and yet that is precisely how it has been described, depending on which audience is listening.
As if to thicken the plot, the company spent the prior week defending itself rather than cutting a ribbon. MP Materials, the only firm mining and processing rare earths at commercial scale in the United States, has sued USA Rare Earth in Texas Business Court, alleging that it misappropriated grain boundary diffusion technology, the precise process by which the Stillwater plant is meant to make its high-performance magnets. The remedies MP seeks could, in theory, constrain how the company uses the very technology at the center of its strategy. The public has now committed billions to a process whose ownership is being contested in a courtroom a few hundred miles south.
And beneath the magnets lies the mine, and beneath the mine lies a study that did not yet exist when the money was promised. The preliminary feasibility study for the Round Top deposit, the resource the federal funding is meant to bring to life, was scheduled for completion at the end of 2026, after the agreements were struck. The government committed to the economics of a deposit before the economics of that deposit had been formally documented. Faith is a fine thing to ask of a congregation. It is a strange thing to ask of a creditor.
What Oklahoma Holds
Which returns us home, to the question that animates the whole enterprise. What did Oklahoma get?
The new factory is in South Carolina. The mine is in Texas. The lawsuit is in Texas. The lavish federal package flows toward both. And the facility Oklahoma was promised, the one for which the City of Stillwater extended public incentives and local officials posed for photographs, remains, by the company’s own securities filings, under development. The capital migrates. The jobs are now promised to multiply elsewhere. The press releases accumulate. What a joke.
Writing By: Dr. King Shultz | Editing by Robbie Robertson
Editor’s Note:
Sources
USA Rare Earth Form 8-K and Exhibit 99.1, SEC EDGAR, June 3, 2026, on the definitive Commerce agreements, the share and warrant issuance, the $17.17 exercise price, the $277 million and $1.3 billion structure and the milestone-based disbursement. https://www.sec.gov/Archives/edgar/data/0001970622/000121390026064453/ea0293402-8k_usarare.htm
USA Rare Earth Form 8-K, SEC EDGAR, January 26, 2026, on the original letter of intent, the $21.50 placement price, the existing warrant repricing to $7.00 and the treatment of government financing as an exempt issuance. https://www.sec.gov/Archives/edgar/data/1970622/000121390026007457/ea0274031-8k_usarare.htm
Rep. Zoe Lofgren, letter to Commerce Secretary Howard Lutnick, March 19, 2026, on the equity stake that survives withdrawal and the Cantor Fitzgerald conflict. https://democrats-science.house.gov
Sen. Elizabeth Warren, letter to Commerce Secretary Howard Lutnick, February 25, 2026, on the conflict of interest in the Cantor Fitzgerald brokered raise. https://www.warren.senate.gov
CNBC, Commerce Department takes equity stake in USA Rare Earth, January 26, 2026, on the government stake and the $4.1 billion capital requirement. https://www.cnbc.com/2026/01/26/usa-rare-earth-shares-jump-20percent-as-commerce-department-takes-equity-stake.html
MINING.COM, USA Rare Earth selects South Carolina site, June 2, 2026, on the $1.2 billion plant, the roughly 490 jobs and facility functions. https://www.mining.com/usa-rare-earth-selects-south-carolina-site-for-rare-earth-metals-and-magnet-plant/
FOX 25 / KOKH, Stillwater Rare Earth plant years behind schedule, April 2026, on the SEC under development language and the DEQ site inspection. https://okcfox.com
The Oklahoma Post, MP Materials Sues USA Rare Earth Over Magnet Trade Secrets, May 28, 2026. https://theokpost.com/news/business/mp-materials-sues-usa-rare-earth-over-magnet-trade-secrets-naming-ex-engineer/2026/05/28/
The Oklahoma Post, Stillwater’s Magnet USAR Facility Deal: Wall Street Wins, Oklahoma Loses, May 16, 2025. https://theokpost.com/news/business/stillwaters-magnet-usar-facility-deal-wall-street-wins-oklahoma-loses/2025/05/16/
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