(Bloomberg) -- Torchlight Energy Resources Inc., the tiny oil company touted on Reddit as a possible short squeeze, moved quickly to cash in on its sudden popularity by selling about $100 million in new shares.
The Texas-based oil driller that started the year with a market valuation of $71 million disclosed the share sale in a federal filing late Monday. Torchlight, which has seen its valuation more than double in just the past week to more than $1 billion, said it may issue another $150 million in stock.
Torchlight shares fell as much as 25% on Tuesday and were down 18% to $8.11 at 12:34 p.m. in New York. Chairman George McCabe was the company’s largest investor as of Feb. 1 with a 10.6% stake; Chief Executive Officer John Brda was the No. 3 holder with 1.6% as of mid-March.
The company, which closed at an all-time high on Monday, was incorporated in 2007 in Nevada as Pole Perfect Studios Inc., which planned to offer fitness classes it said were “centered around a ‘fireman’s pole’ often found in gentleman’s clubs.”
Torchlight has been inactive for more than four years, according to data from Texas’s main oil-industry regulator, and the company warned as recently as last month that it might go out of business. The explorer has accumulated almost $114 million in losses since its inception and expects more losses going forward.
(Updates stock decline in third paragraph.)
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Reddit-Hyped Oil Explorer Sells $100 Million in New Shares - Yahoo Finance
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