(Bloomberg) — Obscure oil company Torchlight Energy Resources Inc. saw its shares more than double in a week after it became the latest stock touted on Reddit as a possible short squeeze.
The Plano, Texas-based company jumped as much as 74% to $10.88 a share on Monday before paring some gains, though it’s still up about 130% from a week ago. Torchlight, which has a market capitalization of about $1.2 billion, is the second-biggest gainer on the Nasdaq this year.
In December, Torchlight announced a deal to combine with Metamaterial Inc., a Canadian company that describes itself as a designer and manufacturer of “complex films and other materials called metamaterials.” Torchlight said Monday that the deadline for closing the agreement with Metamaterial had been extended to June 30 to allow for the payment of a preferred stock dividend.
Incorporated in 2007 in Nevada as Pole Perfect Studios Inc., a health and fitness company, Torchlight warned last month in a federal filing that it might go out of business. The company has accumulated losses of almost $114 million since inception and expects more losses in the development of its business, according to the filing.
Derek Gradwell, a spokesman for the company, didn’t immediately return phone and email messages seeking comment.
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