Share Talk Weekly Small Cap Movers & Shakers, Saturday 16th September 2023

With all the buzz surrounding Arm Holdings’ impressive entry into the Nasdaq, it might come as a surprise that London’s secondary market also houses a smaller, yet noteworthy, fabless chipmaker named Sondrel (Holdings) PLC.

Sondrel specializes in creating application-specific integrated circuit (ASIC) designs. Simply put, these are computers tailored for a singular function.

For example, Bitcoin miners utilize ASIC-designed computers solely for the purpose of mining Bitcoin. You catch the drift.

While Arm Holdings soared in New York, increasing by 20% on its debut, Sondrel faced challenges. Its stock declined 15% this week due to project setbacks and reduced client orders. Overall, Sondrel has plummeted by a staggering 76% this year.

In their recent earnings report, the company admitted that its annual revenues would be “significantly lower than market predictions,” affecting the annual losses.

Joe Lopez, the CFO, resigned this Wednesday, with Nick Stone stepping in as an interim CFO. Was this just coincidental?

Blue chips outperform the junior market The AIM All-Share Index had a shaky start, dropping about 1% on Monday. This decline occurred even as the blue-chip index began the week positively, expecting major economic news.

However, junior stocks made a positive turn as UK unemployment matched forecasts, along with the European Central Bank’s 25 basis point interest rate decision. Though US inflation was slightly high, it didn’t significantly affect the markets.

By the end of the week, the AIM All-Share had balanced out at 746.42. This was notably lower than the FTSE 100, which increased by over 3%.

Shares in vape distributor Supreme PLC (AIM: SUP) dropped 16.6% after negative research on the environmental impact of single-use vaping kits.

Ocean Harvest Technology Group PLC (AIM: OHT) faced a setback after its first public earnings report, which noted delays in acquiring European clients due to rising feed ingredient costs, causing an 18% decrease in shares.

Belluscura PLC (AIM: BELL) also experienced an 18% decline in shares after disappointing interim results.

Yet another company to delist Each week brings news of another delisting. This week, it’s Sportech PLC (AIM: SPO), known for its betting site 123Bet and gaming venues in Connecticut, US.

Despite showcasing a threefold increase in earnings on Monday, the company still plans to delist from London’s junior AIM market.

Executive chairman Richard McGuire noted, “Despite better operational results today, the costs of maintaining a public listing and market volatility are diminishing net returns and prospects.” This sentiment isn’t rare in the 2023 capital markets.

Heavy industries come to the rescue This week saw a boost in the heavy industries due to a surge in commodity prices and positive sentiment towards China-related industries.

Critical Mineral Resources PLC (LSE: CMRS) had an exceptional week, jumping nearly 50% after selling its Cyprus assets.

Other industrial leaders like Synergia Energy PLC, Pantheon Resources PLC, and Cadence Minerals PLC all increased by over 20%.

In the communications sector, LoopUp Group PLC (AIM: LOOP, OTC: LUPGF) led the way with a 40% weekly increase after impressive interim earnings.

Keystone Law PLC also attracted attention when it indicated that annual results would surpass market predictions, resulting in shares ending the week up by just over 10%.

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