What happened Shares of rare earth miner MP Materials (NYSE: MP) fell just shy of 15% in morning trading on Dec. 29. Although the shares were able to claw back some of the decline, they still ended the day off by around 11% or so. The backstory here is complex, but it all ties back to the company's creation. So what The year 2020 will be best remembered for the coronavirus pandemic. But the year also saw an increase in special purpose acquisition companies (SPACs or "blank check" companies). These are companies that start life with no business. They effectively sell shares to the public with the promise to use the cash raised to buy another company. This is the way in which MP Materials came into being. A blank check company bought a privately held business, and it became public. Image source: Getty Images. Blank check companies are often complex entities. In this case, to simplify things greatly, there were public shareholders, warrant holders, and insiders. The public shareholders received stock in the newly created MP Materials that trades on the New York Stock Exchange. The warrant holders own securities that they may exchange for stock at a preset price ($11.50 per share) at some point in the future. And the insiders own shares that they are restricted from selling unless certain share-price levels are met within specific time frames. Today's Securities and Exchange Commission (SEC) filing is partially to create roughly 11.5 million shares to account for the exercise of warrants. The company will receive about $132 million if all of the warrants are exercised, but that may or may not happen. The filing was also to register roughly 118 million shares that insiders may resell if they choose to when permitted. The company will not receive any proceeds from such sales. Investors seem to have taken a dim view of the news here, which makes sense. New shares (related to the warrants) and insiders selling after a lock-up period could put downward pressure on the stock price. Now what Having only traded for a month or so at this point, MP Materials stock has roughly doubled in value. The rare earth story is quite attractive to Wall Street today, given the important role these metallic elements play in high-tech products like electric cars. That said, the SEC filing today illustrates the complexity that exists with "blank check" companies. Long-term investors and those with a conservative bent would do well to keep MP Materials on the watch list for now -- at least until it has a longer track record as a public company. It's been a bit of a roller coaster so far, and that may not change for a little while. 10 stocks we like better than MP Materials Corp.When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.* David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and MP Materials Corp. wasn't one of them! That's right -- they think these 10 stocks are even better buys. See the 10 stocks *Stock Advisor returns as of November 20, 2020 Reuben Gregg Brewer has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.Source