From Seraphim To SpaceX
This week there has been plenty of noise regarding the forthcoming SpaceX IPO, its $1.75tln valuation and reports that Elon Musk as founder and CEO has arranged that he cannot be fired. There would appear to be some kickback against both the valuation and the immortality of the CEO on the board. However, I would agree with Elon Musk being guaranteed his position, not only because the company would not be much without him, but also on the basis that if he can convince the market SpaceX is worth nearly $2tln, he deserves the reward. This may be something that some find irksome. But there will always be jealous people around who just wish for others to fail, or at least be taken down a peg or two.
Speaking of being taken down a peg or two, it is nearly 6 months since my father died on Christmas Day, aged 94. It has been one of the worst periods of my life. Some people leave their mark, and if only as a General Practitioner he certainly did. If only delivering twins on his own on one occasion. He gave me my love of the stock market, and was very proud I became CEO of a listed company that I founded. He was a keen investor, and one of the last stocks he invested in was Seraphim Space Investment (SSIT) nearly 5 years ago. In December the shares we just over £1.
They are now fast approaching £3. Indeed, I interviewed the company a few months ago and am rather pleased that the shares have rocketed since the interview. It is the same story for EnSilica (ENSI) where I also approached the company for an interview as thought the shares were too low. They doubled soon after the call. Of course, as of now the best interview reaction of the year has been Kendrick (KEN) in January. But everyone and their mother is taking credit for the share price rise there, apart from Chairman Colin Bird, who really should be shouting from the rooftops.
The other aspect of the stock market we are reminded of in the wake of SpaceX is how much of a stock market culture there is in the US, how exciting people make it in that country, and how crap we are at this game here. Most of this relates to the anti-money culture we have, and anti-success. But it is apparently even worse than that, as an update on LinkedIn posted as I write has reminded us. It comes from Hugh Sargeant, fund manager at RGI UK Recovery. He said “Our clients keep selling UK equites = we have no money to invest = there is no price discovery in your shares = your company is incorrectly valued = you are vulnerable to a bid.” Well, at least the last part is not necessarily a negative. One would expect more M&A, with the latest nap for M&A, Entain (ENT) still a decent prospect.
Halo Minerals (HALO)
While many in and around the stock market like to moan about the London market, decent companies with strong management do still take the plunge and get listed. In the case of Chile focused copper tailings specialist, Halo Minerals, we have a well funding company (£4m IPO in March). Being focused on tailings the path to production is quicker, and now with a non-lefty government in Chile, the lay of the land is very much in Halo’s favour.
This Week’s Risers
One of the very real problems with the small cap area is the ongoing defamation and abuse companies get, something that the regulators appear to condone or at least turn a blind eye to. Those knocking small cap companies are responsible for losing private investors millions, and preventing those companies from raising money due to all the mudslinging they face. Obviously, only companies who are unlikely to be able to fight back legally are picked on, and the conspiracy among those who carry out this ongoing campaign is well hidden / denied. I am reminded of this with regard to Georgina Energy (GEX), the top rising stock this week. It announced that the Hussar EP513 drill contract executed. And it would appear that either the “knockers” have given up on attacking the company, or some fresh slur is waiting in the wings. However, whatever the case, well done to GEX for staying the course. As I have said before, having self proclaimed vigilantes running the stock market is like having Dracula running a blood bank. Indeed, most of the victim companies are picked on for personal / psychotic reasons, and ironically many of the worst situations are left alone. I could name many, but it is certainly not in my nature, and I would not want to make a living out of making other people’s lives a misery, or ruining them completely.
While GEX was up 77% – a persistent bear victim, another one which is attacked constantly is First Class Metals (FCM). Therefore, it is all the more satisfying not only that the shares have been called up here since their 50 day moving average rebound some days ago, but that the company is on the front foot since last month’s bonanza gold intercept at Roy, Sunbeam. Above recent broken resistance the shares are still capable of hitting 3.75p one year triangle top resistance – see the latest charting video,
X is very often a good source for the stocks that could be today’s winners, losers, or are just being ramped. Coiled Therapeutics (COIL) recently appeared on this inexact radar. Of course, we are looking at the new incarnation of Roquefort (ROQ), another defamation target. The shares were up 46% on no new news. The main news here was he Company’s acquisition of the exclusive worldwide licence of AO-252 from Coiled Therapeutics in March.
Although Invinity Energy (IES) has been making the right noises for quite some time, the leading global manufacturer of utility-grade energy storage, announced that it has selected Invinity to design a GWh-scale vanadium flow battery (“VFB”) for deployment at the Technology Centre Laufenburg. This is clearly a game changer, and the 42% share price rise since the announcement on Thursday could be just the start of the re-rate.
A well-received interview on Capital Compass, and the revelation that Buccaneer Energy Plc (BUCE) has received notification from Bono Energy Group Limited of a stake of approximately 6.18%. Shares of BUCE were already in recovery, but it looks as though a long term turning point is on its way from here on in.
After the company has had its fair share of negative coverage, we heard this week of board family buying at ShoeZone (SHOE), something which put the Smith family holding over 50%. Good on them given that the shares were up 35% on the week, and have had a brutal bear run since reducing guidance after last month’s trading update. But as was noted then the company is debt free and has higher cash levels than a year ago.
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.
