Commodities & Metals
Say Goodbye to Torchlight Energy, Hello to Meta Materials
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After markets closed on Friday, Torchlight Energy announced that it had paid shareholders its promised special dividend of one share of Series A preferred stock for each share of Torchlight common stock. At the same time, it announced a reverse stock split of 1 share of new common stock in Torchlight for every 2 old shares.
At 12:01 a.m. EST Monday, Torchlight ceased to exist and its reverse merger with Canada-based Metamaterials was completed. The new company, Meta Materials Inc., will begin trading on the Nasdaq after Monday’s opening bell under the ticker symbol MMAT.
Torchlight stock closed at $4.95 a share Friday, and Meta Material stock was assigned a value of $9.90 prior to Monday’s opening. The stock is trading down about 2.5% at $9.65 in the premarket session.
Depending on whom you ask, the lower share price was either predictable or a conspiracy. It was predictable because the only thing propping up Torchlight stock to begin with was an expected payout to former shareholders in the company who would benefit from the sale of Torchlight’s oil and gas assets. We’ve noted before that the total value of those assets is likely less than $100 million and the payout per share based on that value would be less than $1.00 per share. That could happen, but we won’t know for a while yet.
A post on Reddit’s r/TRCH group outlines the conspiracy:
We are dealing with the Devil’s who manipulate the markets everyday to their advantage. Today could be the start of a squeeze but be sure as [sh*t hedge funds] are going to try and shake out as many people as they can before they fully cover. Expect wild price action. We know they have to cover, why give them any discounts. I will HOLD. This is not financial advice and i’m not a financial advisor. 🚀
As of June 15, some 15.3 million Torchlight shares were sold short, nearly a third of the company’s total float. What this post suggests is that hedge fund managers are going to do their best to drive the price of Meta Material down in order to minimize the amount the funds would lose from having to cover their short positions by actually buying the stock. Not impossible.
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