Meta shares spike — but it's a Canadian materials company, not the rebranded Facebook
- Meta Materials, a Canadian materials technology company, rose after Facebook CEO Mark Zuckerberg said he was changing his company's name to Meta.
- Investors have put money into stocks in the past like Signal Advance and Zoom Technologies, based on news from companies with similar names.
- Meta Materials has a market cap of about $1.5 billion.
Meta Materials spiked late on Thursday, for the same reason that Zoom Technologies rallied in 2019 and Signal Advance surged in January: It's all about the name.
Facebook co-founder Mark Zuckerberg on Thursday said his company will now be called Meta. The official corporate name will be Meta Platforms and, starting Dec. 1, the stock will trade under ticker symbol MVRS.
Meta Materials has nothing to do with Facebook. It's a Canadian material science company, whose technology is used for things like "transparently blocking a specific color of light, or invisibly heating a window in a car," according to its website.
Sometimes investors don't know or don't really care.
After the close of regular trading on Thursday, shares of Meta Materials, which trades under ticker symbol MMAT, surged as much as 25%, following a 4.8% gain during market hours. With the rally, the company is worth just over $1.5 billion, a fraction of a percent of the value of the company formerly known as Facebook.
George Palikaras, the CEO of Meta Materials, tweeted on Thursday, "I would like to cordially welcome @Facebook to the #metaverse."
Meta Materials is headquartered in Dartmouth, Nova Scotia, on the far eastern end of Canada, about 3,800 miles from Zuckerberg's company in Silicon Valley. Palikaras has a PhD in metamaterials, the website says.
In an email to CNBC, Palikaras said, "We love the AR VR and metaverse space and bring the best meta materials to enable its commercial success. Software and Hardware innovations will be important." The company said in a press release earlier on Thursday that it will be joined by Facebook Reality Labs in an online panel next week on the future of Augmented Reality eyewear.
It's not the first time a company has rallied based on its name.
In April 2019, is a tiny Chinese wireless communications company named Zoom Technologies shot up more than 80%. The pop came just as Zoom Video Communications, the buzzy video chat app, made its Nasdaq debut.
Clubhouse Media more than doubled during the day on Feb. 1, though nothing changed at the public relations, advertising and media distribution company. Rather, investors were giddy about social audio app Clubhouse, which was blowing up in tech and entertainment circles. Tesla CEO Elon Musk told his Twitter followers a day earlier that he would be "On Clubhouse tonight at 10pm LA time."
And in January of this year, an obscure company called Signal Advance, which is so small that it trades over the counter, rocketed 1,100% after Musk similarly touted a very different Signal to his followers.
Musk tweeted "use Signal," referring to the encrypted messaging app that serves as an alternative to texting apps Facebook's Messenger, WhatsApp and Apple's iMessage service.
Signal had to clarify to users and investors that it's not Signal Advance and isn't even a for-profit company.
"It's understandable that people want to invest in Signal's record growth, but this isn't us," Signal tweeted. "We're an independent 501c3 and our only investment is in your privacy."
While traders can try and get in on these moves to make a quick buck, the rallies don't tend to last. Signal Advance is back to trading at 79 cents, down 99% from its high in January of $15.80. Clubhouse Media closed on Thursday at $1.15, down 94% from a high of $17.99 after Musk's tweet. Zoom Technologies sold off almost all of the gains from its big move by the end of trading that day.
Meta Materials has already experienced what it's like to be a so-called meme stock, trading based on internet chatter and Reddit-fueled momentum. The stock traded as high as $18.40 on June 21, and closed up 58% that day. More than 200 million shares changed hands, compared to a typical day of less than 10 million per day of late.
Even with the after-market jump on Thursday, Meta Materials is still 69% below its close on June 21.
WATCH: Facebook goes Meta