Critical Metals Sinks 11% as European Lithium Deal Nears New Share Issuance; USA Rare Earth Tumbles 10%, MP Materials Falls 6%

Rare earth stocks are sliding on a risk-off day, and Critical Metals Corp. (NASDAQ:CRML) carries an extra burden as new shares from its European Lithium deal head toward the market. Critical Metals stock trades at $7.11 during the afternoon session, down 11% from its prior close. The drop leaves the stock up 2% year to date (YTD).

The Invesco QQQ Trust (NASDAQ:QQQ) is down 4% amid this week’s big tech earnings fallout. That risk-off mood is landing hardest on volatile small and mid-cap stocks, and rare earth names fit that profile.

Critical Metals Faces a Wave of New European Lithium Shares

Critical Metals disclosed on October 28 that the schemes of arrangement for its all-stock purchase of European Lithium became effective October 27. The record date was October 29, and new shares go to European Lithium shareholders on the November 5 implementation date. Those shares should start trading on Nasdaq on November 6, though the company warned that the dates are indicative and subject to change.

Under the share scheme, each European Lithium share converts into 0.045 of a Critical Metals share. For the related option scheme, the calculation uses a scheme VWAP (volume-weighted average price) of $7.25. That reference price sits above where Critical Metals stock trades.

A larger share count spreads Critical Metals’ ownership across more stock, so each existing share claims a smaller slice of future profits, and traders often sell ahead of new shares arriving since recipients may sell once they can.

What Critical Metals Gains in Greenland and Austria

The deal is expected to give Critical Metals full ownership of the Tanbreez rare earth project in southern Greenland, which the company calls one of the world’s largest rare earth deposits. Beyond Greenland, Critical Metals highlights its Wolfsberg lithium project in Austria, which carries a binding lithium hydroxide offtake with BMW.

So far, the company remains pre-revenue. Critical Metals posted a net loss of $120.38 million for the six months ended December 31, 2025, and has raised substantial doubt about its ability to continue as a going concern.

USA Rare Earth and MP Materials Slide Before Earnings

USA Rare Earth (NASDAQ:USAR) stock is at $9.52, down 10%. That leaves the stock down 20% YTD. On the operating side, USA Rare Earth’s Q2 2026 revenue of $5.82 million came with a gross loss of $1.58 million.

MP Materials (NYSE:MP) stock is at $39.21, down 6%, the smallest decline of the three. Year to date, the stock is down 22%. Higher sales of neodymium-praseodymium (NdPr) oxide and metal lifted MP Materials’ Q2 2026 revenue 89% year over year to $108.49 million, but the company still posted an adjusted loss of $0.01 per share.

Both USA Rare Earth and MP Materials have earnings reports coming up. A fragile market plus upcoming results can magnify selling in barely profitable or pre-revenue mining and magnet companies.

How Critical Metals Differs From Its Rare Earth Peers

Critical Metals is a developer with no production at its Greenland rare earth or Austrian lithium projects, so its value rests on permits, financing and turning supply term sheets into binding deals. That blend of rare earths and lithium also sets Critical Metals apart from its two peers.

USA Rare Earth is building a mine-to-magnet chain, combining its Texas Round Top deposit with early magnet output in Oklahoma, while MP Materials sits further along, running the Mountain Pass mine in California and making magnets in Texas.

Critical Metals’ Share Debut and the Earnings Tests Ahead

High-beta stocks tend to fall harder than the broad market on volatile days, and this week’s tech selloff has pushed money toward safer assets. Critical Metals now faces the question of whether the market absorbs the new European Lithium shares once they begin trading on November 6.

Bulls point to tight supply. MP Materials CEO James Litinsky said on August 6 that the sector is “in a regime right now of controlled scarcity.” The bears counter that Critical Metals carries a going-concern warning and still needs Greenland’s approval for a separate Tanbreez ownership amendment.

Investors planning for retirement should note that all-stock deals leave existing shareholders owning a smaller slice of a larger company, and early-stage miners like Critical Metals can swing sharply. Beyond the share debut, watch for the USA Rare Earth and MP Materials earnings reports and any U.S. policy news on critical minerals. The European Lithium share overhang could keep pressure on the stock until it settles.

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