Plus Ça Change
I have been writing about the stock market in my current form for 25 years, basically from the Dotcom Bubble. Now we are allegedly in an AI Bubble. For the bulk of the past 25 years I have been trolled online. This has happened from people who either disagree with a bull / bear call, do not want me to be successful (even though it would make no difference to them), or quite simply think I am stupid or foolish. Seeing online that I am not the only one who gets attacked in this way is of course comforting. As is having experienced bullying (as most kids do) at school, a good preparation. But in my 60th year it is rather tiring, and certainly part of the anti-entrepreneur malaise that we have in this country, which has returned after the Thatcher years.
What is not acceptable is the ongoing harassment and bullying that so many small cap companies get. It is bad enough for them negotiating the slings and arrows of Rachel Reeves’s attempt at destroying the economy, without seeing many CEOs receive slurs, defamation, and threats, 99% of which is purely for shorting purposes.
You might say that this is the lay of the land if you want to run a public company, and this is a reasonable point. But it is still the case that at the say, sub £50m market cap level and below the ability to fight back against bad actors is limited. And the bad actors know it. Some years ago I was told by one of the victim CEOs that the London market has a protection racket. If you do not play the game you are personally discredited, you cannot raise money, and shareholders sell out.
This might be understandable if we were in the 20th century, but we are not. Even worse, the powers that be seem to be happy to turn a blind eye to the orderly working of the stock market. This would be understandable if listed companies were not paying through the nose to advisors to deliver best practice. Indeed, all of this explains why fewer and fewer companies chose to get listed. And as was said to me during the week, this suits the regulators as it means they have less work to do for the same money.
Bitcoin Treasury
The online trolls were busy this week not only trying to bring down the companies (that they are short of / or not invested in and trying to ramp). Smarter Web (SWC) remains a prime target for these people, presumably because they did not enjoy the journey from sub 5p to over 600p on the way up, because they were “too clever” to do so. These same wise people never tell you when they get it wrong / lose their shirt. Instead, they are enjoying a feeling of schadenfreude, as far as the presumed losses of retail investors who have lost their shirts on the way down. I have to say that I have watched dozens of Warren Buffett interviews, and have never seen him laugh at those who have lost in the market, or wished losses on others. But then again, you have to have a certain sadistic personality to do so.
For what it is worth, rather like the stocks that were caught up in the pandemic bubble, it may be a long haul back – years, and one that is dependent on cryptos multi-bagging in order to offset the dilution of multiple raises in the BTC Treasury brigade. The company looking to break the mould in the space with a leveraged strategy, rather than a diluted one, is Amazing AI (AAI). We look forward to hearing progress on October 23rd: https://www.investormeetcompany.com/amazing-ai-plc-1/register-investor?utm_source=twitter&utm_medium=social&utm_campaign=meeting_locked
October Crash Month
At the last count there have been two decent attempts (after the US shutdown) at delivering a stock market crash this month. The first was President Trump’s tariff attack on China the week before last. This week it was an alleged crisis in the private lending sector in the US. This was highlighted by, among Goldman Sachs. Perhaps they have been caught short of the stock market since the April rebound. Whatever the case, we saw shares in UK banks (nothing really to do with this) retreat, but no real crash so far. The good news is that if we can get through the next two weeks, we have one of the best opportunities of the year to buy the stock market. Indeed, I go for buy on Bonfire Night / sell on Valentine’s Day, as one of the most reliable times to be in the market. Let’s see if it works in coming months.
This Week’s Stock Risers On News:
There are fewer things sweeter at the small cap end of the stock market than a company that goes from being perceived as a zero, to becoming a hero. This has been the case in the past 6 weeks for Eco Buildings (ECOB), the modular housing group. Before that it was always supposed to be the Ikea of its space, but could not really stretch further than Albania, or perhaps Chile at a strength. But now the rollout has begun. Rather than far flung third world destinations, perhaps it could focus on building in a close to home third world place like London. Shares of ECOB climbed nearly 200% this week. Up nearly 100% was former bear / defamation target Uru Metals (URU). However, the bears appear to have lost their mojo, as the company announced a combined ground gravity and frequency-domain electromagnetic survey over two priority targets at the Company’s Zeb Nickel Project near Mokopane, Limpopo, South Africa.
Interestingly enough, shares of Strategic Minerals (SML) have been edging up for most of the past month, as it would appear that some people successfully guessed that the company would announce exceptional tungsten drilling results at Redmoor. After years of being just another small cap resources play, the company has hit the big time at the right time, now that tungsten is part of the strategic metals / critical minerals gold rush.
Apart from resources stocks finally having their time in the sun, we have also seen the return of small cap biotechs. This is a great development for not only long suffering shareholders who have been in the wilderness since the pandemic, but also represents a general risk on mood amongst investors. In the case of Genedrive (GDR), the 50% share price rise on the week came in the wake of shareholders actually vetoing the company’s equity financing plan. This may be seen as some as turkeys voting for Christmas. But at least the share price has gone up.
From a situation where funding is in question, to a situation where it should be on its way imminently. This was the case for Shuka Minerals (SKA) as it announced that Gathoni Muchai Investments Limited’s $1.35m cheque is finally in the post and should arrive this week to fund the Kabwe Zinc Mine in Zambia. Shares of SKA were also up 50%.
Shares of Kefi (KEFI) have already more than doubled in the past month, as the company has suggested it is nearly there in terms of the full launch of Tulu Kapi. This week it announced that it was nearly, nearly there, or as the Executive Chairman said, “The process for full launch of Tulu Kapi continues intensely on all fronts with all parties, with all steps remaining scheduled for this month and next in accordance with the Tulu Kapi Project syndicate’s agreed schedule. With the gold price at a record high this is the perfect time to be launching Tulu Kapi and I look forward to providing a further update in the near term.”
It is normally a good sign when a company sees its shares rise sharply in the wake of a fundraise, and this was the case for Altona (REE), a resource exploration and development company focused on critical raw materials in Africa. The net proceeds of the fundraise will be used to repay outstanding debt of £600,000. Part of the 36% rise on the week was likely due to speculation that the company could be on the receiving end of strategic U.S. funding sooner, rather than later.
Mila Resources (MILA) was up at year share price highs by the end of this week, with the stock market enjoying the company’s latest announcement of the completion of diamond drilling at its Yarrol Project, Queensland. MILA said “With assays now pending, we look forward to sharing results with our investors and stakeholders in the forthcoming weeks and to advancing swiftly into the RC campaign later this year which is fully funded from our capital raise earlier this year.”
Stocks Rising On No New News:
Eurasia (EUA) was up by a quarter in the wake of the previous week’s promise that broker Oak Securities will be serving up a research note later this month on the multi-metal Russia focused miner. One would guess the prospect of fresh peace talks regarding Russia / Ukraine also helped the mood here, as it did at Ukraine focused Ferrexpo (FXPO), with shares of the iron ore producer up 21% on the week. Lithium stocks appeared to have bounced back with the bear run in the metal apparently coming to an end. This helped Zinnwald (ZNWD) bounce 31% on the week, while Chile focused Cleantech (CTL) managed a 21% rise on the week, no doubt helped along by an online presentation on Thursday, and a well received investor lunch presentation I attended myself on Wednesday.
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.
