Stock Market Vigilantes
I think that most people who know what they are talking about in the City of London, for instance, the brokers, corporate advisers, and management of listed companies themselves, would agree that if anything, the London stock market is over-regulated. This is not good for business, and actually works against investors looking for decent returns.
Indeed, I am sure that if one asked the powers that be at the Financial Reporting Council, AIM Regulation, or the Financial Conduct Authority, they would admit that the are so many rules they struggle to keep up, let alone listed companies attempting to file their accounts. But at the same time, the reason we have regulators is to avoid the risk associated with vigilantes such as using the names of regulators in vain or appearing to do their work. This is in much the same way that we have the police, rather than private militia. Indeed, using AI I looked up “problems with vigilantes” and you can see what came out. Ring any bells?
All of this subversion of justice / due process, comes in the wake of the bombshell move by our Labour government to curb the use of jury trials. This is understandable given the cost, and the fact that we know juries can bend to the suggestions of barristers like willow wood. But we know that after hundreds of years the jury system is the devil we know and one of the safeguards in terms of the “innocent until proven guilty.” We are literally in danger of judges being judge and jury, rather like the aforementioned danger of running with vigilantes and their malevolent, self-serving accusations.
The Run Up To Christmas
The run up to Christmas, just as the run up to the summer holidays normally sees a flurry of companies going to market to ensure they make it to through the next few months. In general, one has to ask why some companies leave it to the “last minute” in terms of raising cash, or at least do so at a bad time of the year. What tends to happen is that the amount of cash raised is less than it should be, as is the discount to the prevailing share price. This was perhaps not quite the case with Metals One (MET1) in the sense that the critical and precious metals exploration and development company, this week raised £4.4m in an upsized placing at 2p each, a steep markdown from Monday’s 3.4p closing price – with a 41% discount to the previous closing price. That said, shares of MET1 have traded as high as 50p during the year. Its strategy of being an opportunistic buyer of value projects looks sound in the present market. It is just a shame that it could not raise, or did not raise at better levels.
A similar thing in terms of good company, shame about the placing price / timing, could be said about GenIP (GNIP). Here shares of the technology consultancy providing Generative Artificial Intelligence (GenAI) services to help research organisations and corporations commercialise their innovations, have generally been in a range between 20p – 30p this year. The market has warmed to news from the company in recent months, regarding new products with increased margins, repeat orders, as well as expanding the geographical and sector footprint. GNIP raised £300,000 at 10p. If we get the hockey stick jump in the fundamentals for 2026, this will appear cheap as chips.
This Week’s Risers
Anglesey Mining (AYM) gave the small cap area its biggest win of the week, with a 200% rise over 5 days. This came off the back of a debt settlement, something which should allow the company to push forward at pace. Hardide (HDD) managed a 108% rise on the week off the back of a £1.8m order. All the provider of advanced surface coating technology is to blow its own trumpet a little more, and of course, get fresh orders. Genincode (GENI) was up 70% on the week. But arguably should have been up more given the way it was able to reveal two blockbuster news announcements on consecutive days. Indeed, the genetic testing company has once again underlined what a good year it has been for small cap biotechs. We really must be in a bull market, or AI et al is really boosting the space. Another riser this week was Narf Industries (NARF), a cybersecurity provider. We have always known that the company is deeply embedded with the US government. But this week we found out to the tune of a 2 year $3.5m contract.
Disclaimer & Declaration of Interest:
The information, investment views, and recommendations in this Zaks Traders Cafe interview are provided for general information purposes only. Nothing in this interview should be construed as a promotion or solicitation to buy or sell any financial product relating to any companies under discussion or referred to or to engage in or refrain from doing so or engage in any other transaction. Any opinions or comments are made to the best of the knowledge and belief of the commentator but no responsibility is accepted for actions based on such opinions or comments. The commentators may or may not hold investments in the companies under discussion.
