Shares of Torchlight Energy Inc. rose as much as 74% to a record high of $10.88 on June 21 as it became one of the latest companies to grab the attention of retail investors.
The oil and gas producer’s shares were recently up 59% at $9.97, with more than 360 million changing hands, making it the most heavily traded stock U.S. exchanges. It was Torchlight’s busiest trading day on record.
The company, which is being bought by industrial materials maker Metamaterial Inc, last week announced an agreement for sales of up to $100 million of its shares and a special dividend of preferred stock to be issued to shareholders of record as of market close on June 24.
Torchlight was among the most discussed stock on trading-focused social media site Stocktwits, a platform commonly seen as a measure of interest from retail investors.
Message volumes on Stocktwits related to Torchlight rose 26%, with nearly 98% reflecting positive sentiment toward the oil and gas explorer's shares on Monday afternoon.
“I think it’s social media driven once again. I don’t think there's investors like hedge funds or mutual funds saying we've got to invest in this,” said Dennis Dick, head of markets structure and proprietary trader at Bright Trading LLC.
Rallies in video game retailer GameStop and AMC Entertainment Holdings have in recent weeks helped reinvigorate a meme stock craze that began at the start of the year, fueled in-part by retail investors congregating on platforms such as Reddit’s WallStreetBets.
Shares of GameStop were recently down around 7%, while AMC’s were off by 5%. The two stocks are up around 960% and 2560% year-to-date, respectively.
Data from brokerage Fidelity showed Torchlight was the second most traded stock on its platform on June 18, with buy orders outnumbering sell 1.6-to-1.
The stock also had a short interest of 24.7% of freefloat, data from analytics company Ortex showed.
Torchlight said last week it would raise $100 million by selling its shares, following in the footsteps of other beneficiaries of meme stock rallies such as GameStop Corp. and AMC.
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