Recent weeks have seen impressive investor interest for Meta Materials (MMAT).

In late September, MMAT’s share price soared to $6.50 per shares. MMAT stock, however, has fallen to $5.30 at the time this article was written.

In anticipation of MMAT stock being a short-squeeze stock, one key factor driving the stock up in recent weeks was optimism. Short-term interest in short-squeeze stocks has increased as retail investors seek smaller-cap stocks. Short-term traders enjoyed a pleasant ride thanks to a spike in volume driven by options in the last weeks.

This volatility is not a good thing for long-term investors. MMAT is a stock that has become increasingly popular with short-term bettors.

Given the recent volatility, MMAT stock is still somewhat bearish for me right now. Let’s now look at the reasons for this rally and see if there is a chance of another one. (See Insiders’ Hot Stocks on TipRanks)

The Short-Squeeze Possibility 

Stocks with higher than average short interest rates and borrowing fees are likely to attract interest from both retail traders and speculators. MMAT stock is an example of this.

Meta Materials was identified in the last few weeks as an company that has a high possibility of a short squeeze. This stock should be watched, despite the fact that interest in Meta Materials appears to have dropped since October. However, due to low float as well as other factors this company is a great choice.

Meta Materials was repeatedly listed as a short squeeze candidate on several high-profile websites. The company has a high short volume ratio of 52% and a very high rate of borrow fees. Investors found short-term options trading attractive due to these factors and the low stock price.

Is there another rally with a short squeeze? Yes. As we have seen in other volatile short squeeze strategies, there is a downside to these stocks.

MMAT stock seems to be a short-term investment that is best suited for aggressive traders who can predict how momentum will affect the stock’s near-term return. This is not true for me.

Others catalysts driving interest in MMAT stock

Meta Materials has attracted institutional investors’ attention, in addition to its short-squeeze potential as well as retail investor interest.

Metamaterials are expected to reach a staggering $10.7 million by 2030. This market will grow at a rate that is comparable to the IoT and energy sectors.

Meta Materials isn’t content to sit on its laurels. Meta Materials is determined to grab as many market shares as possible. Thus, it’s perhaps unsurprising to investors to see Meta Materials exploring various M&A opportunities.

Meta Materials announced the completion of its purchase of Nanotech Security Corp., a transaction valued at C$90.9 Million on Oct. 5. This deal will significantly increase Meta Materials production. Meta Materials can now benefit from a broad range of technologies such as Nanotech’s 5G, Solar Energy, Carbon Capture, and other innovations.

MMAT is also affiliated with Stanford University’s SystemX Program. Businesses can now sponsor Stanford research in collaboration through this program. It is cost-effective and easy. MMAT would like to support research by Stanford students, and even recruit them. 

There’s more. It has also announced the formation of a group of scientists as part its scientific advisory board. According to the company, the team of experts will be able to spearhead Meta Materials’ innovation drive.

The Bottom Line

MMAT stock has a lot to love, however the company is not profitable. In the past year it has lost more than $50 million and spent almost $9million in cash. The company has poor foundations, so investors who are bullish about its growth need to face them.

Nonetheless, if the company experiences increased revenue in the future, the current stock price may be a good entry point.

Disclosure: Chris MacDonald had no position in the securities listed in this article at the time it was published.

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