Torchlight Energy Resources (NASDAQ:TRCH) dropped 30% on June 23, extending the previous day’s losses of 25%. However, TRCH stock is still up around 600% year to date. Interestingly, natural gas and oil prices were high in early trading, and thus the drop is not associated with the commodities underpinning the company’s business. Torchlight is working on a merger with Canadian-based Metamaterial, but news on this came out on June 21.
Therefore, the drop might be associated with discussion on Reddit platforms where Torchlight has joined the meme stock craze. It is vital to remember that the company is in a complex merger discussion with Metamaterial seeking a US listing. After consummation of the deal, the merged entity plans to get rid of the company’s energy operations. The complexity of a deal is the reason the stock is getting attention on Reddit.
For now, investors should watch TRCH from the sidelines owing to the volatility. Subject to closing the merger deal, Torchlight is a stock to watch in the coming weeks.
Market Reaction:
On Wednesday, TRCH stock slumped 29.70% to $4.92 with more than 136.90 million shares, compared to its average volume of 25.52 million shares. The stock has moved within a range of $ 4.6300 – 5.9400 after opening the trade at $5.92. Over the past 52-week, the stock has been trading within a range of $0.2100 – 10.8800.
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