Everyone loves the sweet smell of success. Well, nearly everyone. For instance, there has been the revelation in The Times (after everywhere else), that Tesla made more money in a month from trading Bitcoin, that it did from selling cars in the whole of 2020. Clearly, this was meant as a jibe in the manner of sour grapes, not objective reporting. The rest of the world knew that Tesla had turned a massive profit as soon as it revealed it had bought into the cryptocurrency some days ago.
In the case of Vela (VELA), the early stage and pre-IPO investor (the place to be in the current once in a generation bull market for small caps) said that had made £168,801 from selling shares in cannabis play Kanabo subscribed to at 6.5p, checking out part of their holding at 23.5p. In fact, the peak this week for the newly floated Kanabo has so far been 51p. Clearly, our friends at Vela are not into short term technical analysis to determine their exit points, with shares of Kanabo ending the week at 31p, still well above the initial profit taking level. That said, traders pointed out that Vela has totally de-risked their position in Kanabo, with the company putting its winnings back into its war chest to invest elsewhere.
A company which has had a rather strong run of investing success in the recent past is Braveheart (BRH). Indeed, with a 12p low in December, the latest 6% leaves the shares over £1 higher than they were in December. The current position here is that the sharp rise in recent days suggests a FOMO in terms of the anticipation by traders of what newsflow may emerge next week with reference to the company’s Paraytec quick Covid-19 tester.
You can tell you are in a bull market when: share of companies which have struggled and flatlined at the bottom of their trading ranges for year, are not only at the top of the stock market leader board, but do it with heavy volume. To be fair, this state of affairs has been true for some months. However, it seems that this month even previously stuck in the mud stocks have finally emerged from the darkness. A great case in point is Premier African Minerals (PREM). Here the shares soared 35%. The last official news from the company was way back November, when Premier said that it had achieved positive gold assay results from its Ligonha Gold Project. An explanation for the surge in the stock, symptomatic of current market conditions, is that some traders were betting on a large discovery at Ligonha – presumably on a “the longer the wait, the bigger the asset basis.” This is clearly a variant of the no news is good news cliché.
Indeed, there were a number of situations where news felt like it was overdue, at least judging by the behaviour of the price action. For instance, Canadian Overseas Petroleum (COPL) added another 9% after the previous session’s revelation that it had secured a $65 million Senior Credit Facility. This was described as a significant positive step in the previously disclosed planned process of obtaining financing and completing the closing of its acquisition of Atomic Oil and Gas.
Another well primed looking situation was pharma services group Open Orphan (ORPH). Here, almost by the back door, the shares made another all-time closing high at 32.5p, the second in a week. It would appear that this week’s announcement of the world’s first COVID-19 characterisation study receiving approval from a specially convened Research Ethics Committee has really gained traction with investors.
With its shares down from 2p in June, it would appear that investors were finally happy to draw a line under the extended bear phase at copper and gold producer, explorer and developer, Rambler Metals (RMM). Earlier in the week the company announced that it has raised £7.6m before expenses by way of an oversubscribed placing at a price of 0 .3 pence per placing share. This plus the way that a NED from Anglo Asian Mining (AAZ) had joined in the same role at Rambler, provided confidence that an inflection point has been reached at the company. The shares rose 7% to 0.34p.
To end the week, it was interesting that there were some stocks where there has been a delayed positive reaction to recent news. For instance, Cybersecurity solutions to brand protection and online threat hunting group Brandshield Systems (BRSD) rose 4% after announcing that it has entered into a partnership with Silicon Valley specialist communications and media relations firm, VSC earlier in the week.
Gold explorer Wishbone Gold (WSBD) was up 15% the day after saying that a detailed high-resolution magnetic survey recently flown over the Company’s Red Setter Project had delineated multiple highly prospective magnetic targets over a much larger 3km x 1km area than previously interpreted.
Another Richard Poulden vehicle Upper Thames Holdings (AQUIS:UPPT), was also making a splash, with the shares up 16%. Here, investors were betting on the current boom in all things blockchain boosting the company which has just raised £516,000 as part of its new strategy to link conventional financial products to the blockchain.
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