A Digital Assets Boom
Given the way that we are currently in a digital assets boom, and this is the remit of Pluto, it is difficult to dial down the superlatives. There are a number of factors at play. The main one is that this space has come of age in the past year, especially since the pandemic began. It is also the case that despite a Gold Rush towards this area, there are by definition only a few specialists with the knowledge and expertise required to deliver success to shareholders. Indeed, for those looking around to decide which horse to back on the stock market it may be the case than in Pluto the proof of future success has already been delivered even before the company has come to market, via an IPO currently due in May.
Oxygen
The evidence in terms of the powers that be at Pluto are on the top of their game comes from its latest investment in a new FTX project, Oxygen, which is a DeFi Prime Brokerage Protocol which is fully scalable – one of the key advantages of the technology. Pluto, which has digital assets Wunderkind Atif Yaqub on board invested in 2m tokens at a price of just 10 cents. The value of this purchase is already $3, something which means that Pluto is already sitting on a near $6m gain. If, as anticipated, Pluto reveals more similar investments in the near term, the already soaring NAV is likely to be well supported.
Cash Pile
In terms of sitting on a decent cashpile, the deal adds to the embarrassment of riches at Pluto which just raised $40m in its latest funding round, well over what it asked for. The icing on the cake was an add on investment from crypto mining star Argo Blockchain. As well as the $10m it added to Pluto’s coffers, there was the validation of a stock market hero in the new economy, which already has a market cap of well over $1bn. All of this implies that if an industry leader wishes to be an integral part of the Pluto story, it is highly likely that others will follow, over and above what we have already seen.
Pluto / Pires Investments / Argo Blockchain
The story so far for Pluto is therefore that we are looking at a company which already has a market cap of approaching $65m and seems set to provide a potential liquidity event on day one of its listing for those who are already on board. As well as Argo Blockchain (ARB) it is worth noting that another key next generation technology play, Pires Investments (PIRI) is also riding high on the shareholder register, as it has a stake of 6% in Pluto.
The Pires Valuation Kicker
As is often the case, the market tends to be somewhat lazy in terms of marking up the portfolio valuation kicker an investment company has under its belt. However, this tends to mean that the re-rate can be all the more aggressive, something which has been underlined in the case of the aforementioned Argo Blockchain, where it was only really the price of Bitcoin breaking previous all time highs at $20,000 that really kickstarted a rally from under 10p in November to over £2.50 now. Pires, with its exposure to digital assets investment, amongst several other tech play irons in the fire. This has tripled the share price since the turn of the year, but with the Pluto investment ongoing – and more Oxygen type deals in the pipeline, there may be more to come for this process.
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