Torchlight Energy shares surge 74 per cent in latest meme stock rally

American flags hang outside of the New York Stock Exchange, in this Tuesday, Feb. 16, 2021, file photo. (AP Photo/Frank Franklin II, File)

Shares of Torchlight Energy Inc rose as much as 74 per cent to a record high of US$10.88 on Monday as it became the latest company to grab the attention of the Reddit pack of small-time social media driven investors.

More than 196 million shares in the company, which authorized a US$100 million stock sale last week, changed hands, over six times their 25-day average trading volumes and making it the most heavily traded stock on the Nasdaq.

Torchlight, an oil and gas producer that is being bought by industrial materials maker Metamaterial Inc, was also the most discussed stock on trading-focused social media site Stocktwits, a platform commonly seen as a measure of interest from small time investors.

Message volumes on Stocktwits related to Torchlight rose 14 per cent, with more than 98 per cent reflecting positive sentiment toward the oil and gas explorer's shares.

Data from brokerage Fidelity showed Torchlight was the second most traded stock on its platform on Friday, with buy orders outnumbering sell 1.6-to-1.

The stock also had a short interest of 24.7 per cent of freefloat, latest data from analytics company Ortex showed.

After losing US$71 million last week, short-sellers had lost another US$138 million on Monday after Torchlight hit a record high of US$10.88 per share, according to Ortex.

Torchlight shares, which have mostly been on the rise since June 11, pared some gains but were still up 30 per cent at US$8.13 at 11:08 am E.T.

Torchlight said last week it would raise US$100 million by selling its shares, following in the footsteps of other beneficiaries of meme stock rallies such as GameStop Corp and AMC Entertainment Holdings. (Reporting by Arathy S Nair and Aaron Saldanha in Bengaluru; Editing by Anil D'Silva)