![]() ![]() The opinions expressed in this article are those of the writer, subject to the Publishing Guidelines. On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. Read More: Penny Stocks - How to Profit Without Getting Scammed If we ever do publish commentary on a low-volume stock that may be affected by our commentary, we demand that ’s writers disclose this fact and warn readers of the risk. That’s because these “penny stocks” are frequently the playground for scam artists and market manipulators. On Penny Stocks and Low-Volume Stocks: With only the rarest exceptions, InvestorPlace does not publish commentary about companies that have a market cap of less than $100 million or trade less than 100,000 shares each day. Also, its Altman Z-Score slipped to 1.74, reflecting distress and possible bankruptcy risk in the next two years. Among them, the investment resource identified a buildup of inventory. Not adding confidence to the matter is Meta Materials’ financial profile.Īccording to Gurufocus, MMAT stock incurs several warnings. Unfortunately, investors may perceive the public offering of MMAT stock as a desperation move, hence the sharp selloff. On paper, the Corporate Finance Institute states that the “…warrant represents a potential source of capital in the future when the company needs to raise additional capital without offering other bonds or stock.” ![]() ![]() The issuance of warrants may also bring up speculation as to why management would incur dilution for MMAT stock. Warrants tend to have much longer periods between issue and expiration than options, of years rather than months.” When an investor exercises their warrant, they receive newly issued stock, rather than already-outstanding stock. According to Investopedia, unlike options, “…warrants are dilutive. Primarily, the concerns of the deal center on dilution. Unfortunately, the enterprise doesn’t appear particularly viable. ![]() Nevertheless, MMAT stock must make financial sense for stakeholders. These sectors include aerospace, automotive, consumer electronics, 5G, and more. Meta specializes in holography and lithography and which can facilitate greater efficiencies for myriad industries. Not liking the terms of the deal, stakeholders quickly dumped MMAT stock.ĭilution Fears Drive Volatility for MMAT StockĪbsent any other market-related context, Meta Materials represents a fundamentally critical and relevant business. The offering is expected to close on Tuesday and net about $25 million in proceeds, before underwriting discount and estimated expenses.”Īlso, underwriters will receive a 30-day overallotment option to purchase up to an additional 12.5 million shares at a discount. In addition, “ach warrant is exercisable at a price of 37.5 cents per share and will expire in five years. With a significant number of warrants involved in the deal, the dilutive potential scared off investors.Īccording to MarketWatch, the Nova Scotia-based advanced materials firm stated before the opening bell Friday that it will be “…offering 83.3 million shares of common stock and warrants to buy up to 83.3 million more shares at a combined public offering price of 30 cents per share and accompanying warrant.” After management announced the pricing of its previously proposed underwritten public offering, MMAT stock fell 42% before paring losses slightly to 40% down. InvestorPlace - Stock Market News, Stock Advice & Trading TipsĪmid a corrective backdrop in the equities market, materials and nanocomposite manufacturer Meta Materials (NASDAQ: MMAT) increased pessimism exponentially. ![]()
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