Meta Materials (NASDAQ:MMAT) stock is in the spotlight after the company announced this morning that it had completed the distribution of Next Bridge Hydrocarbons common stock. Shareholders with settled shares of Meta Materials Preferred Shares (OTCMKTS:MMTLP) as of Dec. 12 were eligible to receive the distribution on a 1-to-1 basis.
The events leading up to this distribution were and still are highly controversial. Previously, the company had disclosed that shares of MMTLP would be “cancelled” on Dec. 13. However, the Financial Industry Regulatory Authority (FINRA) decided to halt MMTLP on Dec. 9, surprising and angering shareholders across the board. The regulatory agency citied halt code U3, which is reserved for “extraordinary events” that will have a “material effect” on the share price.
Meanwhile, the status of MMTLP remains unclear, as the ticker does not appear on FINRA’s daily list of deletions for the date range of Dec. 9 to Dec. 31.
MMAT Stock: Meta Materials Completes Next Bridge Distribution
Some shareholders have speculated on social media that the FINRA halt was enacted in order to protect short sellers. They argue that since MMTLP was scheduled to be cancelled, the short sellers would be forced to cover their positions by buying MMTLP.
There is currently a Change.org petition with over 11,000 signatures that seeks to achieve justice for shareholders. The petition demands an end to dark pool trading and payment for order flow (PFOF), among other requests. On top of that, a shareholder of both MMAT and MMTLP has filed a legal complaint against FINRA. The complaint states that the shareholder is member of The Florida Bar.
The shareholder alleges that FINRA violated laws, such as the Sherman Act and the Securities Exchange Act. In addition, the shareholder requests an extension of the cancellation of MMTLP by two trading days and a postponement of the distribution “until accounting has been verified and the liquidity of stock has been restored.”
For the nine months ended Sep. 30, Next Bridge reported revenue of $30,214 and a net loss of $4.76 million. Revenue is attributed to the sale of oil and gas. Additionally, the company has warned that it will need to raise capital in the “immediate future.”
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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.