Meta Materials (NASDAQ:MMAT) finally has some good news to report. The functional materials company has stayed relevant this year mostly due to meme stock momentum. That hasn’t generated real growth, with shares declining more than 60% over the past two quarters. The company is having a hard time outrunning the controversy that ensued when it spun off its preferred MMTLP shares only to have trading halted by the Financial Industry Regulatory Authority (FINRA).
But yesterday, Meta Materials announced that it has been awarded a new purchase order for “its authentication, nano-optic security business.” This news has caused MMAT stock to pop today, but it doesn’t mean that shares are likely to stay elevated.
What’s Happening With MMAT Stock
Even with this positive update, MMAT stock is displaying a fair bit of volatility today. As of this writing, it is up 3.5% after several dips. Its current trajectory suggests that the stock will likely fall back into the red later today as the news cycle moves on from this development. This performance is in keeping with how the stock has performed for the past five days, remaining elevated but just barely in the green.
What exactly is this new purchase order that sent shares up today? In a statement released yesterday, Meta Materials issued the following description:
“META has been executing on a multi-year frame agreement with a maximum value of US$41.5 million over a period of up to five years with a confidential G10 central bank customer. The new purchase order represents an additional $2.1MM, bringing the total orders received by META to approximately $16.5MM for continued work under the agreement. The customer may elect to award additional purchase orders to increase the scope of this award.”
It’s true that this order could lead to further business opportunities for Meta Materials in the long run. But even with news like this, it’s hard to be optimistic about its growth prospects.
MMAT stock has struggled significantly since it fell from its early December 2022 peak. When a stock bleeds so much value that it ultimately falls from more than $2 per share to 23 cents on a good day, investors have no real reason to bet on it. Moreover, this company’s highly checkered past should scare away even the retail traders who can stomach some risk. One purchase order doesn’t mean that Meta Materials can signal a turnaround.
On the date of publication, Samuel O’Brient 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.
