(Bloomberg) — Torchlight Energy Resources Inc., the tiny oil company touted on Reddit as a possible short squeeze, moved quickly to cash in on its sudden popularity by selling about $100 million in new shares.
The Texas-based oil driller that started the year with a market valuation of $71 million disclosed the share sale in a federal filing late Monday. Torchlight, which has seen its valuation more than double in just the past week to more than $1 billion, said it may issue another $150 million in stock.
Torchlight shares fell as much as 9.3% on Tuesday in New York after closing at a record high a day earlier. The company was incorporated in 2007 in Nevada as Pole Perfect Studios Inc., which planned to offer fitness classes it said were “centered around a ‘fireman’s pole’ often found in gentleman’s clubs.”
Torchlight has been inactive for more than four years, according to data from Texas’s main oil-industry regulator, and the company warned as recently as last month that it might go out of business. The explorer has accumulated almost $114 million in losses since its inception and expects more losses going forward.
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