It was major news on June 28 when Torchlight Energy Resources merged with Metamaterials to form Meta Materials (NASDAQ:MMAT). In the wake of that event, traders seeking pure-play exposure to the functional materials market could buy the shares of MMAT stock.
Just to recap, meta materials (the products, not the company) are a subset of functional materials. The potential applications of meta materials span multiple industries, including automotive, aerospace/defense, consumer electronics, healthcare and energy.
Believe it or not, Meta Materials has a total of 82 patents and 67 pending patent applications. That sets the company apart on Wall Street and makes MMAT stock the clear-cut choice for prospective investors.
However, the stock’s price action in 2021 has been wild, and it might even be called unstable. So let’s delve into a little bit of technical analysis before we dig up some of the material facts on Meta Materials.
A Closer Look at MMAT Stock
Prior to the aforementioned late-June merger, MMAT stock, which was trading as TRCH stock, spiked from $4 to nearly $22.
It was definitely a hype-fueled bubble and wasn’t meant to last. Painfully, the share price deflated in August, even touching $3 at one point. By the way, it’s possible that Reddit traders contributed to the summertime rally.
So this might be an instance of a short-squeeze pump fizzling out – and a lesson on what can happen to investors who chase after parabolic price moves. Yesterday MMAT stock closed slightly below $5.
That’s not a bad thing necessarily, as we can at least say that the roller-coaster ride is over. The recent price stability is healthy and should provide some reassurance to anxious investors. Still, it’s important for the bulls to keep MMAT stock above the psychologically significant $5 mark. Eventually, a recovery of the $10 level should result in higher price objectives.
Bigger and Better
With a market capitalization of $1.36 billion, Meta Materials isn’t a massive company. However, it’s growing in other ways. We already cited Meta Materials’ expansive patent portfolio, for example.
There’s financial growth in the works, as well. During the second quarter of 2021, Meta Materials’ total revenues increased by 197% year-over-year. Furthermore, in the first half of the year, Meta Materials’ total revenues grew 88% YOY.
On top of all that, Meta Materials is also expanding, using a recent, value-added acquisition. In a new press release, the company disclosed that it has acquired Nanotech Security in an all-cash transaction. Nanotech Security develops nano-optic security features designed to provide anti-counterfeiting solutions. Its products are used in the government, banknote and brand-protection markets.
New Features and Solutions
So now, along with Meta Materials’ already broad array of products, the company can expand into new vertical markets: offering nano-optic materials to enhance security features for anti-counterfeiting and brand protection.
Moreover, it would be an understatement to say that Nanotech’s Quebec-based production facility is vast. It’s situated on 11 acres of land, is housed in a a 105,000-square-foot building, and enables Nanotech Security’s production capacity to exceed 7 million square meters per year.
That’s just the starting point, though. Astoundingly, Meta Materials plans to approximately double the facility’s production capacity to 15 million square meters over the next one to two years. It’s commendable that Meta Materials is branching out and waging war against counterfeiting.
This venture is likely to increase in size and scope. According to Troy Bullock, former Nanotech CEO and current Meta Materials strategic advisor, Meta Materials “plans to roll out many exciting new features and solutions to benefit the currency and brand security industries” in the coming months.
The Bottom Line
All in all, slightly below $5 just doesn’t seem like the right price for MMAT stock. Investors don’t have to rely on Reddit users to push it higher. Instead, they can simply count on Meta Materials to continue innovating and expanding.
And with the recent Nanotech Security acquisition, both counterfeiters and the short sellers of Meta Materials should be worried.
On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.