All eyes are on Meta Materials Preferred Shares (OTCMKTS:MMTLP), as shareholders of the stock will soon receive one share of Next Bridge Hydrocarbons for each share of MMTLP owned. That’s because Meta Materials (NASDAQ:MMAT) plans on spinning off Next Bridge as an independent reporting company. The date of record will fall on Dec. 12, while the distribution date will be on Dec. 14.
MMTLP shareholders should conduct adequate due diligence on this situation, as the preferred shares will cease to trade on the over-the-counter (OTC) market following the spinoff. The newly received Next Bridge shares will not be tradable either, nor are they eligible for electronic transfers through clearing corporations.
Next Bridge operates as an oil and natural gas company with a key project in the Orogrande Basin in West Texas. The company reported revenue of just $30,124 and operating expenses of $3.84 million for the nine months ended Sep. 30. That brought the net loss for that period to $4.76 million.
Meanwhile, Next Bridge’s cash balance of $2.1 million pales in comparison to its short-term debt of $21.15 million. To alleviate this, the company plans on raising capital in the “immediate future.” That would benefit the company while diluting existing shareholders.
5 Investors Betting Big on MMAT and MMTLP Stock
Tracking institutional ownership is important, as these large investors provide liquidity and support for stocks. According to WhaleWisdom, only two 13F filers reported owning shares of MMTLP as of Q3:
- Cypress Capital Management: 2,150 shares. Cypress’s position remained unchanged during Q3.
- FNY Investment Advisers: 100 shares. FNY’s position remained unchanged during Q3.
Furthermore, WhaleWisdom reports that no 13F filers own options against MMTLP. Still, several mutual funds own shares of the company:
- Vanguard Total Stock Market Index Fund: 3.43 million shares, accurate as of Q2.
- Vanguard Extended Market Index Fund: 1.75 million shares, accurate as of Q2.
- Vanguard Explorer Fund, Inc: 181,756 shares, accurate as of Q2.
- Fidelity NASDAQ Composite Index Fund: 84,218 shares, accurate as of Q2.
- DFA U.S. Micro Cap Series: 18,077 shares, accurate as of Q2.
Meanwhile, counterpart Meta Materials (NASDAQ:MMAT) is much more popular among institutional investors. As of Q3, 94 13F filers reported owning shares of MMAT, a decline of four filers from the prior quarter. The largest shareholder among all investors is 10% owner Thomas Welch with a 46.82 million share stake as of Q2 of 2021. Other notable investors include BlackRock (NYSE:BLK) and Millennium Management.
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On the date of publication, Eddie Pan did not hold (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.