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The newly launched stock of Meta Material Inc. (NASDAQ:MMAT) made its presence left on the stock markets ahead of its debut on Monday, June 28. Gaining investor attention, MMAT stock surged six per cent in premarket trading.
However, after the trading session began, the stock dipped about 20 per cent (11:45AM EST) to trade at US$ 7.91 apiece.
MMAT stock debuted on the Nasdaq Stock Market after Meta Material, a hi-tech materials manufacturer, merged with Torchlight Energy Resources (NASDAQ:TRCH).
The company reportedly aims to divest energy assets and access capital markets in the US through the merger.
Commenting on the completion of the merger, Meta's President and CEO George Palikaras said that after a decade of application development and scientific discovery, Metamaterials can offer “sustainable solutions” with semiconductor precision.
Earlier in June, Torchlight upsized its stock sale by US$ 150 million after it raised the value of its stock offering to US$ 250 million from US$ 100 million. Its share price had shot up in the past few months and the company reportedly took advantage of that rally.
According to reports, Torchlight distributed a special dividend to its shareholders before the merger, and implemented a 1 for 2 reverse stock split.
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What does this merger mean for investors?
A ‘metamaterial’ is an engineered substance with special properties that are not found in natural materials. In simple terms, metamaterials are made after the amalgamation of multiple components from composite materials like metals and plastics.
Following the merger, Meta Material reportedly plans to work on enhancing its products and making high-performance functional materials. According to Mr Palikaras, the company will aim to showcase how metamaterials can surpass their conventional counterparts.
Those interested in this technology might focus on the company. However, for Torchlight investors, this is completely a new domain. As there is a complete change of business operations, there are chances that the company might face initial hiccups and resistance from Torchlight investors. As a result, the price could dip further in the next few days.
Torchlight's business operations were based on the acquisition and development of domestic oil fields in the US.
Previously trading as ‘TRCH’, Torchlight’s stock returned 68 per cent to the stockholders in the past month and about 125 per cent in the last three months.
The above constitutes a preliminary view and any interest in stocks should be evaluated further from investment point of view.
