Shares of Meta Material, formerly Torchlight, reverse to trade down 20%
Shares of Meta Material Inc (MMAT.O) gave up premarket gains to fall 20% on Monday, the first day of trading after a merger that saw the niche hi-tech materials maker swallow Torchlight Energy Resources, which was at the center of huge speculative bets by small individual traders.
Torchlight’s stock rose as high as 74% last Monday as retail investors piled into the stock with record volumes. The shares, however, gave up some of the gains after the company upsized its stock offering.
In a reverse takeover to list on the Nasdaq and access the U.S. capital markets, Metamaterial Inc, a smart materials and photonics company, last year agreed to merge with Torchlight, an oil and gas producer. The deal includes plans to divest the legacy energy assets.
Torchlight said on Friday that it closed the deal and the new company, Meta Materials Inc, would begin trading under the ticker symbol “MMAT” on Monday.
The company, which pushed back the closing of the deal to June 30, upsized its stock offering to $250 million last week from $100 million to take advantage of the share price rally.
Torchlight also said on Friday it paid a special dividend to its stockholders of record on June 24 and that it implemented a previously approved 1 for 2 reverse stock split.
The Plano, Texas-based company traces its roots back to Pole Perfect, incorporated in 2007 in Nevada to market feminine fitness dance studios utilizing the advantages of pole dancing.
In November 2010, Pole Perfect bought Torchlight Energy and abandoned all of its previous business plans within the health and fitness industries before formally changing its name to Torchlight in 2011.