MP Materials Is Down 34%. What History Says Happens Next.

MP Materials Has Dropped 34% in 164 Days. Here is What History Says.

MP Materials Corp. (MP) has officially entered the red zone as of May 29, 2026, after its drawdown reached 34.4% from its all-time high of $98.65. This shift from the yellow zone indicates a significant escalation in risk for the rare earth producer, as the current price of $64.70 reflects a sustained 164-day decline that now exceeds the stock's typical historical volatility.

Understanding the Drawdown Severity Score™

Our data shows that MP Materials Corp. (MP) now carries a Drawdown Severity Score™ of 5.1. In our proprietary modeling, a score above 5.0 places an asset in the red zone, suggesting that the current sell-off has moved beyond a standard correction and into a period of high-intensity drawdown. This is a notable departure from the stock's historical behavior, where the average max drawdown is only 14.5%.

The transition from the yellow zone to the red zone is a critical marker for risk management. While the stock has spent 164 days in this current drawdown, our data indicates the average drawdown duration for this asset is typically just 79 days. By more than doubling its average recovery time, the current price action suggests that the market is struggling to find a floor for the Western hemisphere’s primary rare earth supplier.

A Rare Historical Threshold

Contextualizing this drop requires looking at the total history of the stock. We have tracked 24 total drawdown events for MP Materials Corp. (MP). Out of those two dozen instances, the stock has dropped 30% or more only 3 times. This makes the current 34.4% decline a statistically rare event for the company.

When the stock enters this level of severity, the recovery process has historically been grueling. Our data shows that for these specific comparable drops of 30% or more, the average duration is 528 days. It is important to note the small sample size here, as only 3 events meet this criteria, but the disparity between a standard 79-day pullback and a 528-day deep drawdown highlights the potential for a prolonged "U-shaped" recovery rather than a quick "V-shaped" bounce.

What is Driving the Move to the Red Zone?

The fundamental catalysts behind this 164-day slide are a mix of operational news and geopolitical friction. According to Barron's, MP Materials Corp. (MP) recently saw its stock pop and then drop following earnings reports that "wowed markets" but were quickly overshadowed by broader rare earths dynamics. While Q1 earnings and revenues topped estimates, as reported by Yahoo Finance, the market appears more focused on the long-term pricing of neodymium-praseodymium (NdPr) and the competitive landscape.

Legal and structural headlines have also added to the volatility. Mining.com reports that MP Materials has accused USA Rare Earth of magnet technology theft, a legal battle that Seeking Alpha notes has resulted in a lawsuit filed by the company. Furthermore, internal movements have drawn attention: Stock Titan reports a Form 144 filing involving 150,000 founder shares and various trust sales. These factors, combined with ongoing investor scrutiny regarding the US-China summit and its impact on rare earth supply chains as noted by Quiver Quantitative, have created the "perfect storm" necessary to push the Drawdown Severity Score™ into the red zone.

Data in Perspective: Sector and Market Context

Comparing MP Materials Corp. (MP) to its peers provides further clarity on the severity of this move. While many materials stocks experience cyclicality, a 34.4% drawdown is significantly deeper than the broader market averages for the sector during the same period. The move to the red zone suggests that idiosyncratic risks, such as the litigation against USA Rare Earth and the founder share sales, are weighing more heavily on the ticker than general macro trends.

The current price of $64.70 sits well below the all-time high of $98.65. In the 24 historical drawdowns we have tracked, the stock has rarely stayed in the red zone for extended periods without either a sharp capitulation or the beginning of a long-term base-building phase. Investors often use the Drawdown Severity Score™ to distinguish between a "buyable" dip in the yellow zone and a high-risk structural decline in the red zone.

What to Watch Next

As MP Materials Corp. (MP) continues its 164-day drawdown, the primary metric to monitor is whether the Drawdown Severity Score™ begins to stabilize or continues to climb toward 6.0. A stabilizing score would indicate that the selling pressure is neutralizing, even if the price remains stagnant. Conversely, a further increase in severity would suggest that the historical 528-day recovery average for 30% drops may become the more relevant benchmark for this cycle.

We will continue to monitor the proprietary data for changes in zone status. Monitoring the ticker for a shift back into the yellow zone would be the first data-driven signal that the current severity is beginning to abate.