Why Torchlight Energy (TRCH) stock jumped 65 percent?

Summary

  • Torchlight Energy was the most trending stock on social media platform StockTwits on Monday.
  • The oil and gas company has extended the completion of its merger with Metamaterial to June 30.
  • The stock, which gained 16 percent on Friday, doubled its value last week.

Torchlight Energy Resources, Inc. (NASDAQ: TRCH) stock jumped over 65 percent when the markets opened on Monday, June 21, amid the meme-stock frenzy.

The Texas-based oil and gas company topped the trending list on the social media platform StockTwits, where investors and traders share their ideas.

As of 9:52 am ET, Torchlight shares were trading at US$10.40, up 65.87 percent.

Torchlight’s recent rally started last week. The stock gained 16 percent on Friday while it doubled its value during the last week.

Torchlight currently has a market cap of US$1.37 billion. The stock is up 1385 percent year to date, while it skyrocketed 2636 percent in the one-year period.

Meanwhile, Torchlight said it would extend the completion of its merger with Canada-based Metamaterial Inc. to June 30. Both the companies have agreed to extender the completion date.

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Merger with Metamaterial

Torchlight acquires, explores, and develops oil and natural gas projects in the U.S. The company had interests in the Orogrande Project and the Hazel Project in Texas as of the end of 2020.

In December 2020, Torchlight announced its plans to merge with Canada-based Metamaterial, which makes functional materials and nanocomposite products.

As per the merger agreement, Metamaterial shareholders will hold a 75 percent stake in the combined company. Torchlight shareholders will keep the remaining stake.

Torchlight shareholders have approved the merger. The combined company, which will operate under a new name, will align its operations with Metamaterial’s current business.

Source: Pixabay

In connection with the merger, Torchlight shareholders are entitled to a preferred stock dividend, which the company has declared on June 14. Also, the dividend is to be paid just before the transaction closes.

With the latest extension of the merger completion date, Torchlight will get enough time to pay the dividend on June 25. In addition, Torchlight also announced a US$100 million share sale on June 16.

During the first quarter ended March 31, Torchlight recorded a net loss of US$2 million.

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