The short squeeze that wasn't: how a merger built the machine that stranded sixty-five thousand shareholders

The screen said halted.

Not down. Halted. There is a difference, and on the morning of December 9, 2022, about sixty-five thousand people learned it at the same time. A man in Ohio, a woman in Arizona, a retired electrician in Florida who had been told this was the trade of a lifetime. They opened the same app. They saw the same word. The chart that had been running for thirteen months stopped where it stopped.

The symbol was MMTLP. Four days later it would not exist at all.

This is a chapter about a wrapper. About how you take an oil and gas company nobody wants and a materials science company nobody has heard of, and you wrap them around each other, and then you wrap a story around the wrapping, and then you wrap a halt around the story so nobody can ask the next question. By the time the wrapping is done, the people inside the box have made their money, and the people who bought the box are left holding paper that does not trade anywhere.

The Securities and Exchange Commission, in a complaint filed on June 25, 2024, says that is what happened here. The two men named in the complaint say it is not. One of them, John Brda, the former CEO of Torchlight Energy Resources, has already won a class action dismissal. He says he sold MMTLP, not MMAT, and that the distinction matters. We will get to the distinction. The distinction is the whole point.

I.

Start with what was real.

Torchlight Energy Resources was a small oil and gas company. Ticker TRCH. The kind of name a retail trader added to a watchlist because somebody mentioned it on a forum. In September 2020, Torchlight announced it was going to do something strange. It was going to acquire a Canadian materials science company called Metamaterial Inc. and divest the oil and gas assets. The oil and gas would be spun out for the benefit of the original Torchlight shareholders. The new company would be the science company.

That is two companies trying to leave their old skins at the same time. It is also the structure that produced the wrapper.

The merger closed on June 28, 2021. Torchlight became Meta Materials Inc., ticker MMAT. The legacy oil and gas assets were placed in a holding vehicle and a preferred stock dividend was issued to original Torchlight holders. That preferred stock would later trade under the symbol MMTLP. It existed as a placeholder for the oil and gas business that was waiting to be spun off into a separate private company called Next Bridge Hydrocarbons.

That is the architecture. Now look at what the SEC alleges happened inside it.

II.

Between June 18 and June 24, 2021, in the days right before the merger closed, Meta Materials raised $137.5 million through what is called an at-the-market offering. An at-the-market offering, or ATM, is a way for a public company to sell new shares directly into the open market at whatever price the market is paying that day. The higher the price, the more money raised per share. It is a faucet. The price is the pressure.

To get the pressure up, you need a story.

The SEC says the story was a short squeeze. A short squeeze, in plain English, is what happens when a lot of people have bet a stock will go down, and the stock goes up instead, and they all have to buy shares back at the same time to cover their bets. That forced buying drives the price higher, which forces more covering, which drives the price higher still. It is a feedback loop. It is also a thing that happens organically maybe three times a decade. The rest of the time, it is something somebody is selling you.

According to the SEC complaint, Brda and Georgios Palikaras, the former CEO of Metamaterial, communicated to investors and to consultants and through social media hints that the unusual structure of the MMTLP preferred dividend would force short sellers to cover. The narrative did what narratives do. It moved the stock. The stock moved enough that an ATM offering pulled in $137.5 million.

The SEC's framing in the complaint is hard. The agency wrote that the executives were "more concerned with 'burning the shorts' than creating long-term value for shareholders."

That is the regulator's language. That is not mine.

III.

I have sat at the desk where the story gets written.

Not this desk. A different desk, in a different decade, selling a different product. But the architecture is the same architecture. You do not sell the product. You sell the reason the product is about to move. You do not need the move to be real. You need the belief in the move to be real, and you need it to last as long as the offering window.

The offering window here was six days in June.

In a boiler room, the script is taped to the desk. In 2021, the script was on Twitter, on YouTube, on Reddit, in the chat rooms where retail traders gathered around the idea that they had finally found the thing the institutions did not want them to have. The narrative was particularly effective because it cast the buyer as the hero. You were not buying a stock. You were punishing the shorts. You were part of something. The pen was already uncapped at hour five.

I want to be careful here. The SEC's allegations are allegations. Brda and Palikaras have not been found liable. A class action against Brda was dismissed in July 2025 because the court found the plaintiffs received their shares as a distribution rather than purchasing them, which is a technical standing defect, not a finding that nothing happened. The same logic dismissed claims against Next Bridge Hydrocarbons.

What is on the record is this. The ATM raised $137.5 million. Reporting and the complaint indicate Brda sold approximately 6.77 million shares at an average price of $8.58, which the article in question characterizes as a $58 million profit. Brda has said publicly he sold MMTLP, not MMAT, and that the distinction is meaningful to his defense.

To the holder watching the screen on December 9, 2022, the distinction was not visible. The screen just said halted.

IV.

Walk through the timeline the way a holder would have walked through it.

October 2021. MMTLP appears on the over-the-counter markets. It is a placeholder. It represents your claim on the oil and gas assets that are going to be spun out eventually.

Through 2022, MMTLP trades. It runs. By November 2022 it touches $12.26. The forums are loud. The short squeeze is coming. It is always coming.

November 23, 2022. Meta Materials announces that MMTLP will convert to Next Bridge Hydrocarbons shares for holders of record on December 12.

December 8, 2022. MMTLP drops 58 percent in a single day.

December 9, 2022. FINRA imposes a U3 trading halt, citing an "extraordinary event" and "significant uncertainty in the settlement and clearance process." A U3 halt is the regulator's emergency switch. The valve closes.

December 13, 2022. The MMTLP symbol is deleted.

December 14, 2022. Meta Materials completes the spin-off. Holders receive equity in Next Bridge Hydrocarbons, a private company that does not trade on any exchange.

That last sentence is the one to read twice.

V.

A private company that does not trade on any exchange.

That is what the wrapping was protecting. The holder who bought MMTLP at $9 or $10 or $12 in November 2022, who held it through the drop on December 8, who watched it halt on December 9, who watched the symbol disappear on December 13, ended December 14 holding a certificate for shares of a private oil and gas company. There was no bid. There was no ask. There was no exit.

There were approximately 65,000 of these holders.

Some of them had bought because of the short squeeze story. Some of them had bought because their brother-in-law had bought. Some of them had bought because they were original Torchlight shareholders from 2018 and they were just along for the ride. They were not stupid. They had been told a story about a structure that would force a market reaction, and the story was being told to them by people who, if the SEC is right, knew the structure was being used for something else entirely.

The structure was being used to raise $137.5 million in June 2021, when the price was high.

By the time the structure spun the oil and gas out of the wrapper in December 2022, the people who built it were already gone.

VI.

The legal posture today is messy in the way these things are always messy.

Meta Materials Inc. settled SEC charges on June 25, 2024, agreeing to a $1 million penalty without admitting or denying the findings. The litigation against Brda and Palikaras is ongoing in federal district court. A separate SEC investigation into events around the halt is also ongoing.

The class actions have been losing on standing. Plaintiffs who received MMTLP as a distribution from Torchlight cannot, under current Texas federal court rulings, sue as purchasers because they did not purchase. That is not a finding that the underlying conduct was lawful. It is a finding about who is allowed in the courtroom door.

Next Bridge Hydrocarbons continues to file with the SEC. Its fifth amended Form S-1/A drew additional comments in February 2026. It announced a Participation Agreement in the Imperial Gas Project in January 2026. Somewhere on a balance sheet, the oil and gas assets that were inside Torchlight in 2020 are now inside Next Bridge in 2026.

The shareholders who held them through the wrapper are still holding them.

VII.

Look at what the wrapper did, in order.

A merger created a reason for a corporate action. The corporate action created a reason for a story. The story created the price. The price funded the offering. The offering moved $137.5 million from retail buyers to the company's treasury. The corporate action then converted the placeholder into a private security. The private security cannot be sold.

The press release got the light. The ATM prospectus got the shadows. The short squeeze thread got the rocket emoji. The S-1/A got the comment letter. The retail trader got the ticker. The CEO, allegedly, got the wire.

Sixty-five thousand people got the certificate.

VIII.

The man at the screen on December 9, 2022, did not understand he was the fuel.

He thought he was the spark. He thought he was lighting the fire that would burn the shorts. The story he had been told put him at the center of the trade, and at the center of trades is exactly where buyers like to be told they are. The fuel does not know it is fuel. The fuel believes it is the engine.

Five years on, the SEC is still in court with two men. The settlement against the company is closed. The class actions against the individuals have largely failed on standing. The private shares are still private. The symbol is still deleted.

If you held MMTLP on December 9, 2022, you are reading this with a folder somewhere in your house. Maybe a drawer. Maybe a binder. Inside it is a record of what you owned, and a record of what you own now, and the gap between those two things is what the wrapper does.

The story you were sold was a short squeeze.

The trade you were in was an ATM offering.

You just were not on the side of it you thought you were on.