People making exaggerated claims about a company or its prospects is something which we are all familiar with regarding the stock market. But of course, if “ramping” worked, every stock would eventually enter the FTSE 100. They don’t. This is because investors and supply / demand tend to discover true value over time. However, the shorting agenda works differently to “ramping” which generally tends to be a vague “jam tomorrow.”
Bears tend to fixate on minutiae and distort, very often mixing fiction with fact in order to shake longs out of their positions. They also point to alleged breaches of obscure accounting practices, missed deadlines and of course, when all else fails, character assassination and name calling. To maintain the being back at school theme, they also threaten to sneak to teacher – the regulator, something which is in itself clearly market abuse. After all, say a letter has been written effective leaves the target guilty until proven innocent. Overall, the strategy of malicious scaremongering by shorters to lower a share price, is every bit as wrong as “ramping”. Perhaps even more so, as in the end it is normally the small retail investor who suffers most.
Shares of All Active Asset Capital (AAA)* pared their initial losses well, after being subject to a concerted attempt to undermine the investment company in recent days. In the end the stock closed down just 2.4p at 51.4p after bouncing above the last March support for the shares at 45p, and right on the 50 day moving average at 46p, thus confirming the technical uptrend on one of the top performing stocks both this year and in 2020. The close for AAA was also significant in that it was back above the 50p 200m shares subscription price of UHNWs Nick Candy and David Rosen to raise £100m. Given the nature of that announcement in February, there are no grounds for the bear accusation of a placing well below 50p, a tactic designed as an attempt to lower the share price. Indeed, at the time of the subscription at 50p in February the share price was just under 30p. Therefore, it would be also be logical that any future raise by AAA would be at a premium, (not a discount) as has been the case all the way up for the company. In addition, UHNW investors being happy to pay a premium for AAA may also be taken as a signal of the perceived value of the stock, especially when comparing their judgement of value to rather less financially successful shorters.
Another misconception spread by the bears, mudslingers, and those who clearly do not understand, or want to mislead others, is that warrants are a bad thing. In fact, their role as providing incentives / rewards to investors and management in a way that is aligned to shareholders and performance, remains largely unsung, at least in a positive way. For investment group Gunsynd (GUN) warrants have just been exercised at 1.3p netting the company some £214,000. This can of course be used to enter new investments such as the one announced earlier in the session. In this the company said it has invested £200,000 in DiscovOre (ORE) an Aquis Growth Market quoted investing company going into the medical psychedelic industry. Gunsynd entered a Subscription for 10,000,000 ordinary shares at a price of 2p per share for a total consideration of £200,000.
A couple of mining favourites were also in focus: minerals exploration and development company, Alien Metals (UFO) were up 22% after it reported the results earlier this month of the recently completed litho-structural interpretation and target generation study completed over the Elizabeth Hill Silver Project based on recent and historic combined airborne geophysical survey data. 20 priority targets were delineated by Southern Geoscience from the results of the merging of the combined magnetic data for the project area.
Power Metal Resources (POW), the metals exploration and development company is revealed an agreement has been reached for the acquisition of a 75% strategic interest in a UK special acquisition vehicle which is to acquire outright First Development Resources (Pty) Limited, an Australian private company. POW shares were up 6%.
There was plenty to report at next generation investor Pires (PIRI), over and above its all star shareholder register and strong share price over the past year. Highlights included a total investment of c. £1.7 million made in Sure Valley Ventures and a return of €804,000 achieved from the sale of Artomatix, one of the companies within the SVV portfolio, representing over a 60% return on our initial investment of £1.1 million in SVV. Pires has recently invested £200,010 in Low6, a white labelled mobile sports betting platform for sports teams/franchises. It has also made an initial investment in the digital assets sector leading to a substantial shareholding in Pluto Digital Assets plc – an IPO which could be the hottest of the early summer. Even so cash is still standing at over £1m.
Online threat zapper Brandshield Systems (BRSD) continued its recent run of solid newsflow in that the recent IPO unveiled its External Threat Protection Test, the first free platform of its kind to help companies uncover cyber vulnerabilities. The risk assessment platform is designed to help Chief Information Security Officers and any online company understand their risk exposure in almost instantaneously.
It was the grand return of biotechnology company OKYO Pharma (OKYO) focused on the discovery and development of novel molecules to treat inflammatory dry eye diseases and ocular pain. It announced positive results of OK-201, a non-opioid analgesic drug candidate , delivered topically in a mouse neuropathic corneal pain model demonstrating its potential to treat acute and chronic ocular pain. Shares of OKYO rose 5%, with the company saying that OK-201 demonstrated a reduced corneal pain response similar to that of gabapentin, a commonly used oral drug for neuropathic pain. It added that these observations demonstrated preclinical ‘proof-of-concept’ for the topical administration of OK-201 as a potential non-opioid analgesic for ocular pain, given that the side effects and the risk of addiction to opioids is a serious concern.
Shares of DeepVerge (DVRG) rose 4% as the environmental and life science AI company, signed a non-binding Memorandum of Understanding with China Resources Environmental Protection Development Limited, a wholly-owned subsidiary of China Resources Group. The MOU was to enter into a Joint Venture for the manufacture, assembly and sale of environmental monitoring equipment, with a view to future development of smart environmental platforms, equipment/devices and network management software capability. It will be interesting to see whether this significant deal will allow the stock to return to the top of the recent trading range above 40p.
NQ Minerals (AQSE: NQMI) announced the results of a recently completed surface trenching programme at its 100% owned Beaconsfield Gold Mine in Tasmania, Australia, with “excellent surface gold results being delivered.” The company said that NQ Geologists recently collected samples in three locations on their Beaconsfield Mining Lease 1767P/M. Two of the locations have indicated good gold mineralisation across an area, which has had limited historical RAB drilling and RC holes with shallow gold intercepts. The company now plans a follow up trenching programme prior to embarking on a drilling programme.
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* The author owns shares in All Active Asset Capital (AAA)