![]() ![]() In its recent S-1 registration statement, it discloses $15.8 million of losses as of 12/31/13. In its most recent 10-Q, Torchlight warns of accumulated losses of $23.4 million as of 3/31/14 and that it expects to incur further losses. "At March 31, 2014, the Company had not yet achieved profitable operations, had accumulated losses of $23,402,711 since its inception and expects to incur further losses in the development of its business, which casts substantial doubt about the Company's ability to generate future profitable operations and/or to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due." In its most recent 10-Q, Torchlight discloses the following: And management has a concerning track record, which includes running a public company with a similar track record to the DEER chart above. (To be clear, Torchlight is an RIO but is not Chinese, but it is currently exclusively covered by an analyst whose previous recommendations were Chinese RTOs)Įven if it doesn't go bankrupt, in the words of one hedge fund analyst Torchlight is "hideously overvalued", and the recent registration of stock may be a short term catalyst driving the stock down. Perhaps Torchlight, like the Chinese frauds that analyst covered, and as warned in its SEC filings, will also go to 0. Here is a stock chart of one of these frauds, which he put an $18 price target on as it was on its way to 0. And TRCH is one of two stocks recommended by a research analyst who, at his previous employer, covered and recommended a number of Chinese RTOs, which subsequently went to 0 after being uncovered as frauds. It is rapidly losing money at an accelerating pace, and needs to raise capital, but may have difficulty finding additional direct investment. Despite its promising focus, Torchlight's accounting statements warn of a risk of bankruptcy and likely further losses. Let’s dive into the reason June 30 may be a big date TRCH investors will want to mark on their calendar.Torchlight Energy Resources ( TRCH) is an oil and gas E&P company with assets primarily in the mid-continent US. At least, according to what the market believes it’s worth. Without this $1-$20 extraneous valuation bump, TRCH is likely trading where it should be. Thus, most of the recent volatility we’ve seen in TRCH is related to this company trading ex-dividend the past few days. That said, a massive range of between $1 per share and $20 per share has been discussed. The range of what this dividend could be appears to be still up in the air. This dividend will be paid out to shareholders of record, as of June 22. This combination of meme stock hysteria and merger excitement helped drive this stock in recent weeks.Īdditionally, as a result of the merger, Torchlight announced investors will receive a special dividend of its Series A Preferred Stock. ![]() Indeed, retail investors have jumped on this stock prior to the announcement, spurring additional interest in Torchlight. Shareholders approved the deal on June 11, and Torchlight is set to become a much larger entity in short order as a result. The company’s highly touted merger with Metamaterial (OTCMKTS: MMATF) has driven most of the excitement in this stock. And many of the reasons for this volatility appear to still exist, painting a rather interesting picture for how this stock will perform over the near term. However, this kind of volatility is stomach-churning. Now, investors who have held through this uncertainty are still up. ![]()
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