The Pentagon Just Took An Equity Stake In A Goldman Idea Dinner "Consensus Short"

One month ago, when looking at the stocks most likely to benefit from the US government's transition to realpolitik statecraft, we listed two companies which we were confident would be on the receiving end of the Trump administration generosity, largely due to their critical position in the domestic rare earth element supply chain: MP Materials (MP) and USA Rare Earth (USAR). 

Then just to underscore how vast the bullish case in the name is, we showed that the short interest in (the very illiquid) MP is a whopping 21% of the float...

... and the piece de resistance, was our lengthy report for subscribers "The Coming Rare Earth Revolution And How To Profit: All You Need To Know About The "Ex-China Supply Chain" detailing why MP stood to substantially outperform in the coming months and years as the critical rare earth supply chain was shifted domestically to exclude China, and to benefit domestic miners and producers such as MP. 

As luck would have it, literally hours later the US announced that in an extremely rare transaction, the Pentagon US State Department had taken a 15% stake in our sector favorite, MP Materials, making the US government the largest investor in MP.  

The stock promptly soared 50% as it shot up to top spot in best performing names in the mining sector in 2025, and covering the subscription cost for our premium readers many decades over. 

That was great news. But it was even better news that among the biggest shorts were Goldman's hedge fund clients who, for months, had plotted and schemed how to unobtrusively short the name during the bank's various idea dinner events. Here is an excerpt from the latest note by Goldman energy and natural resources specialist Adam Wijaya:

Rare Earths… how high… biggest move in the space yesterday came from Rare Earths complex… led by MP +51%... have hosted several Metals idea dinners over the last few weeks and this name has been a consensus short… pain yesterday was real...

Yes it was, and it will only get worse as all the sticky shorts realize they are now on the other side from the quite literally the one investor who prints money.  Good luck to them. As for Wijaya, who clearly did not push back against this "consensus" bearishness and was thus fielding some very angry client phone calls, he offers the following tidbits to ease the shorts pain: 

will there be continued follow through?… announcement from the AM clearly one of the biggest for the space, but if you blow out the MP model to 2030… have been hearing the stock trades at a very healthy premium to other base metals / precious / niche metals… is it warranted? Bulls saying yes if you comp to a uranium mining company – but isn’t uranium a structurally different story? There are still general questions around the supply chain for this space and “how this actually works”… there is clearly some work to be done on this theme / space – but after the run yesterday – what makes folks enter? (full note here for pro subs).

Well, Adam, what makes folks enter is the fact that now that the Pentagon is in, it won't leave and the US government will no do everything in its power to hand the company not only resources and infrastructure but also capital on a silver platter. And next time, maybe skim our twitter timeline to get some non-consensus actionable ideas, instead of drowning in the echo chamber of self-reinforcing "idea dinner" mediocrity.

Full Goldman note available to pro subs here.