What happens when a meme stock un-memes? Or is it de-memes? I don't know the exact terminology, but I do know that wild share price swings are part of the territory when investing in stocks that have heavy retail ownership and strong representation on message boards.
One such example is Meta Materials (MMAT) , a Nasdaq-listed, Canadian-headquartered meta materials company. I had the opportunity for a private call yesterday with George Palikaras, Meta's CEO. I am grateful to George for being so generous with his time in what is obviously a hectic time for the company. Meta recently announced the purchase of Nanotech Security, a leader in banknote-security applications, for C$91 million in cash.
Meta has a strong IP estate and many verticals to attack, and, as always, management can explain it better than I can. So, from Meta's corporate presentation:
- Our technology platform encompasses three core capabilities, holography, lithography, and wireless sensing
- Meta has 140 filed patents (76 granted) across 44 patent families (28 granted)
- Key Verticals: 5G Infrastructure, Vehicle Electrification, Combined >$3T in Other Verticals: Advanced Materials, IoT, Medical, Energy, Aerospace and Automotive markets
It's an interesting story with a great patent estate and an impressive list of corporate partners. Meta would fit - not only based on its Canadian domicile - with the five companies that presented two weeks ago at the conference sponsored by my firm, Excelsior Capital Partners. Naqi Logix, Nano One Materials (NNOMF) , Vicinity Motor (VEV) , Lomiko Metals (LMRMF) and Exro Technologies (EXROF) all presented intriguing stories at the ExCap Conference (click on the link for links to the individual conference presentations.) There are so many great, little companies working on changing the world from North of the Border. Meta is an interesting story in its own right and worth checking out. That's it, end of column. Not even close, actually.
Meta's Google stock price chart shows the fantastic, wild ride Meta's shares have been on since their reverse merger with one of my old favorite small-cap energy names, Torchlight Energy. I don't have enough column inches to detail the amazing machinations that accompanied the merger of Meta and Torchlight - two companies that were the result of prior reverse takeover deals themselves - but I think the chart tells all. There was a special dividend, an upsized equity offering, and a great deal of meme-player interest in both companies. TRCH shares went absolutely bananas before the combination was effected (the deal officially closed on June 28th) and rose from a closing Nasdaq price of $4.52 on May 21st to an intraday high of $21.76 on June 21st.
Truly an incredible month, but, as Sir Isaac Newton knew, what goes up must come down. MMAT is trading at $3.40 today, and the stock's roundtrip has been well and truly completed. Amazing.
Meta reports earnings after the bell today, and I look forward to hearing more about this fascinating story from a company that took advantage of the meme frenzy to add more than $100 million to its treasury via the transaction with TRCH and other follow-on offerings. Meta shares are trading lower today and actually crossed the $1 billion market cap threshold after hitting an almost inconceivable $5 billion valuation on that crazy day of June 21st.
Mergers always lead to some pre-closing funny business caused by arbitrageurs and Meta-TRCH trading was obviously inflamed by retail interest from the Stocktwits crowd. That is in the past now.
I look forward to adding MMAT to my coverage list for OHM Research in Sao Paulo. It will fit nicely with Nano One, Vicinity Motor, Lomiko Metals and Exro (Naqi Logix is private.) My guess is that MMAT shares will cease the wild ride that has been ongoing the past three months, but I would watch out for more downside in MMAT as the market, for once, attempts to value MMAT based on fundamentals, not tweets. That's life in the markets in 2021. Never boring.
