r/Wallstreetbets targets the next meme stock, Torchlight Energy Resources (TRCH) which focuses in Oil.
The exploration and production business established in Plano, Texas, with properties in major shale plays such as the Permian Basin and Eagle Ford formation.
Torchlight Energy Resources said on Friday that its deal to buy innovative materials Metamaterial was approved by shareholders.
Torchlight announced on Monday that it will delay the completion of its merger with Metamaterial until June 30 from June 24 in order to pay the special Series A preferred equity dividend.
Meanwhile, followers of the Reddit community r/TRCH announced early Monday that shareholders should “Torch the short” to get the TRCH stock price to 20 on Monday and 100 by Tuesday.
In addition, the stock was mentioned in the popular r/WallStreetBets Reddit community.
TRCH joins the r/WallstreetBets craze
Torchlight Energy rose 46.5 percent to $9.15 on today’s stock exchange after jumping over 80 percent in premarket trade. TRCH stock has increased by more than 300 percent in the month of June alone. Clean Energy Fuels (CLNE), another energy stock that has recently been the subject of memes, was down 7% on Monday.
Following r/Wall Street Bets’ GameStop (GME) short squeeze in January, the so-called “meme stocks” have gained traction.
Short-sellers, primarily huge institutional investors, who bet on a stock’s price falling, were the focus of the organization. The group drove up the price of GameStop shares due to a boom in buying.
If a stock appreciates in value, short sellers may lose a lot of money buying the stock back to settle contracts. Earlier this year, popular short-squeezed stocks included AMC Entertainment (AMC) and BlackBerry (BB).
The core assets of the companies targeted in short-squeezes haven’t changed significantly, and while some individual investors profited handsomely from the GameStop gamble, others lost a lot of money.
GameStop’s stock dropped 3%, AMC’s stock dropped 1.4 percent to 60.31, and BlackBerry’s stock dropped 4%.