What was obvious from the beginning was that this special dividend wasn’t supposed to trade. Or, without a sale, it could morph into shares of a new company. It could have been a cash payment if Meta Materials found someone willing to buy Torchlight’s Orogrande drilling rights. Where the money for that dividend would come from wasn’t immediately clear. Rather, it was meant as a placeholder for a future dividend. What's obvious is that MMTLP is a symptom of a larger disease. The logo the MMTLP community is using on website and in Twitter profiles. This financial innovation was later dubbed MMTLP. Torchlight’s shareholders received a 25% cut along with something special: a novel mechanism for spinning off the Torchlight assets into an untradeable security that short-sellers couldn’t get their grubby mitts on.
Metamaterial got Torchlight’s coveted spot on the Nasdaq exchange and 75% of the new company, Meta Materials (ticker: MMAT). The marriage to Metamaterial was more transactional than corporate synergy. Four years later, Torchlight bought 172,000 acres in Texas’ Orogrande Basin, southwest of the more productive Permian Basin, and subsequently claimed it could potentially extract oil worth 2,700 times what it paid for the land. Torchlight started life in 2010 as Pole Perfect Studios, a business that catered to the decade’s fad of pole dancing for fitness. It was born in December 2020 with the merger of Canadian tech company Metamaterial and the Plano, Texas-based Torchlight Energy Resources.
The upshot was a security backed by an optimistic estimate of West Texas oil reserves that was never supposed to trade being bought up on an over-the-counter marketplace by investors who had beef against short-sellers and a regulatory agency that ended up calling the whole thing off, circumventing possible panic selling but leaving shareholders with nothing.
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