MP Materials Is Down 40%. What History Says Now

MP Materials Is Down 40% in 169 Days. What History Says

As of June 5, 2026, MP Materials Corp. (MP) has entered the red zone after its drawdown reached -40.0%, pushing its Drawdown Severity Score™ to 5.9. This transition from the yellow zone marks a 169-day decline from its all-time high of $98.65 to the current price of $59.18. Historically, drops of this magnitude are rare for the stock, occurring only 3 times in its history, with an average recovery duration of 528 days.

MP Materials Crosses Into the Red Zone

The transition of MP Materials Corp. from the yellow zone to the red zone as of June 5, 2026, represents a significant shift in the stock's risk profile. The yellow zone represents moderate drawdown levels that fall within normal historical variations, whereas the red zone indicates that the asset has entered a period of severe price contraction relative to its historical behavior. The current Drawdown Severity Score™ of 5.9 reflects this transition, signaling that the current drawdown of -40.0% has exceeded typical pullback thresholds.

To put this move in perspective, the stock is trading at $59.18, down from its all-time high of $98.65. This peak-to-trough decline has developed over 169 days. In our framework, the Drawdown Severity Score™ measures not just the absolute percentage drop, but how unusual that drop is relative to the asset's entire trading history. A score of 5.9 indicates that the stock is experiencing a drawdown that is statistically more severe than the vast majority of its historical retracements.

The move from the yellow zone to the red zone occurred as the drawdown crossed key historical support levels. While minor pullbacks are frequent, a -40.0% decline represents a deep correction that historically requires a prolonged period to resolve. By analyzing the speed and depth of this move, we can better understand how the current decline compares to the stock's historical baseline.

Analyzing the Current Drawdown Metrics

An analysis of the historical data reveals that MP Materials Corp. has experienced a total of 24 drawdown events throughout its trading history. Across all 24 of these events, the average maximum drawdown was -14.5%, with an average drawdown duration of 79 days. The current drawdown of -40.0% is nearly three times deeper than the historical average, making this an outlier event in terms of magnitude.

The duration of the current decline is also highly anomalous. At 169 days in drawdown, the stock has spent more than double the average historical duration of 79 days in a state of decline. This extended duration indicates that the selling pressure has been persistent rather than a sharp, short-lived correction. When an asset remains in a drawdown for this long, it often signals a structural shift in investor positioning rather than a temporary imbalance in liquidity.

Comparing the current metrics to the historical averages highlights the severity of the current cycle:

• Current Drawdown: -40.0% (versus -14.5% historical average)
• Current Duration: 169 days (versus 79 days historical average)
• Current Drawdown Severity Score™: 5.9 (Strong, red zone)

Historical Comparison of Deep Drawdowns

To understand what might happen next, we must look at how the stock has behaved during previous deep corrections. Our data shows that MP Materials Corp. has dropped by 30% or more exactly 3 times in its history. These 3 events represent the most severe drawdowns the stock has ever faced.

The average duration of these comparable drops is 528 days. This is a crucial metric, as it suggests that when the stock enters a deep drawdown of 30% or more, the recovery process is historically measured in years rather than weeks or months. The current duration of 169 days is still in its relatively early stages compared to that 528-day historical average.

However, we must note an important caveat: the sample size for these deep drawdowns is very small, consisting of only 3 historical events. With such a limited dataset, a single outlier event can heavily skew the average duration. Therefore, the 528-day average should be viewed as a general historical marker rather than a precise predictive metric.

The table below compares the current drawdown metrics against the historical averages for all drawdowns and the subset of deep drawdowns (30% or more):

| Drawdown Metric | All Historical Drawdowns | Deep Drawdowns (30%+) | Current Drawdown (as of June 5, 2026) | | :--- | :--- | :--- | :--- | | Number of Events | 24 | 3 | 1 (Active) | | Average Max Drawdown | -14.5% | -30% or worse | -40.0% | | Average Duration | 79 days | 528 days | 169 days (Active) | | Drawdown Severity Score™ | Variable | High | 5.9 (Red Zone) |

Understanding the Drawdown Severity Score™

The Drawdown Severity Score™ is our proprietary metric designed to quantify the intensity of an asset's price decline. It scales from 0 to 10, with higher scores indicating more severe and historically unusual drawdowns. The score is calculated by comparing the depth and duration of the current drawdown against the distribution of all historical drawdowns for that specific asset.

For MP Materials Corp., a severity score of 5.9 places the stock firmly in the red zone. The red zone is reserved for drawdowns that represent significant departures from normal trading behavior. When a stock enters this zone, it indicates that the current decline is no longer a routine pullback but a major correction that has broken through historical support bands.

The transition from the yellow zone to the red zone is a critical milestone. The yellow zone represents moderate drawdowns where the stock is experiencing elevated volatility but remains within historical norms. Crossing into the red zone means the price action has deteriorated to a point where historical precedents suggest a longer path to recovery. Our data tracks these zone changes to provide objective, mathematical context to the ongoing sell-off.

Data Limits and Methodology

This drawdown analysis is strictly data-only and relies entirely on historical price action, drawdown depth, duration, and severity metrics. We do not incorporate external market narratives, company earnings reports, analyst ratings, macroeconomic indicators, or industry-specific trends. By focusing exclusively on the mathematical reality of the price history, we provide an objective assessment of risk without the influence of speculative theories or subjective opinions.

It is important to understand that historical performance does not guarantee future results. While the historical averages provide useful context, every market cycle is unique. The small sample size of 3 comparable deep drawdowns means that the historical average of 528 days may not reflect the actual duration of the current cycle. Investors should use these metrics as one of many inputs when assessing their own risk tolerance and investment strategies.

Key Drawdown Markers to Watch

As the current drawdown continues to develop, there are several key mathematical markers that we will monitor to assess whether the risk profile of MP Materials Corp. is shifting.

First, we will watch the -40.0% drawdown level. If the stock continues to decline and the drawdown deepens, the Drawdown Severity Score™ will likely climb higher in the red zone, indicating an even more extreme historical outlier. Conversely, if the price begins to stabilize and move upward, the drawdown percentage will shrink.

Second, the duration marker is highly relevant. At 169 days, the current drawdown is still far below the 528-day average of past deep corrections. If the stock remains in a drawdown for several more months without making new highs, the duration will begin to align more closely with those historical multi-year recovery cycles.

Finally, we will monitor the zone thresholds. A recovery that pushes the drawdown back above the -30.0% threshold would likely trigger a transition from the red zone back into the yellow zone, signaling a reduction in the immediate severity of the sell-off. We will continue to track these metrics daily to provide updated, data-driven insights.