The Cinderella Market?
It would appear that the aftermath of the pandemic has not only caused a boom in trading for LSE / AIM, there has been a decent trickle down to Cinderella market, Aquis Exchange. This junior / disruptive / growth market has famously had more name changes over the years than David Bowie had personas. But while ISDX had an air of the Goblin King to it, and NEX might have had the air of the Thin White Duke, it is to be hoped that Aquis is the Ziggy Stardust (and the Spiders From Mars) that small cap investors have been looking for. Perhaps it does not help that Aquis (Ackwis / Aykwis) itself splits people down the middle in term of how to pronounce it – rather like the word scone.
Such musings aside, and avoiding the phone dealing, which platform can trade through, getting live prices, it may be best to focus on the companies / opportunities listed on Aquis. Instead, it may be worth going with the idea that over the past year since the pandemic there has been a boom in the small cap space, one of such magnitude it has trickled down to Aquis. This is despite the distinctly 1990s feel that trading Aquis stocks can have, and the effective monopoly position the LSE / AIM has had over it for so long.
Digital Asset Winner: KR1 (KR1)
The poster child of the boom has been KR1 (KR1), a digital asset investment company. Here the skill has been KR1’s talent for supporting early stage blockchain and DeFi projects – and by definition getting in at the ground floor price wise. While one would imagine that at times the journey can be a little bumpy, the parabolic rise in many of the assets has meant that the £250m market cap feels rather conservative. One could argue that KR1’s market cap might be close to the £1bn mark if it were listed on AIM or the main market, in the manner of crypto mining stock market darling Argo Blockchain (ARB). That said, KR1 being on Aquis is like Stephen Hawking choosing to teach physics at your local secondary school. Nevertheless, given the 600% plus share price rise since the start of this year, it is difficult to imagine KR1’s share price performing better even on the Nasdaq.
NFT Heaven: Coinsilium (COIN)
A company which could be the new KR1, even though the business model is not a like for like, is Coinsilium (COIN). Rather like KR1 there was a rather long gestation period ahead of this year’s boom in the share price of the blockchain, open and crypto finance venture builder. Indeed, it is 6 years since the company was the first ever blockchain group to list on a stock exchange, with 2015 feeling like the equivalent of the dawn of time in the pace. But if Bitcoin breaking its 2017 peak near $20,000 was the trigger for the rally in KR1 of late, then it has been the arrival of Non Fungible Tokens (NFT), which caused the bull run at Coinsilium and a 250% plus share price rise. Now with digitizing everything from violins to bubble gum cards being all the fashion, the £24m market cap seems modest, especially as it is only a part of the Coinsilium offering.
Financial NFTs: Valereum Blockchain (VLRM)
If there is a flow from those missing out on KR1 going into Coinsilium, then those who missed the rally in Coinsilium have the option of trading down to Upper Thames Holdings (UPPT), which is just about to change its name to Valereum Blockchain (VLRM). Here we continue the NFT theme, but not just on “every day” items, but the financial markets. Given the size of the financial markets, and the likelihood that the convenience of the “blockchain bridge”, plus cost, speed and practicality, could mean that Valereum has built its own railroad. Given the way the shares have risen nearly 800% so far in 2021, and hit 17p at the peak, it would appear that Valereum’s financial NFTs have captured the imagination.
The CBD Space: Love Hemp (LIFE)
Looking at the list of Aquis risers and the simplest groupings are either companies into digital assets, or those focused in the Cannabis space. Given the way that Aquis was rather less square with regard to the (other) evil weed than the LSE, we have already had a decent mini collection of plays in this area before the likes of Kanabo (KNB) and Zoetic International (ZOE) arrived on the scene. Once again we have the conundrum of whether there is an Aquis discount / LSE premium. For instance, synthetic CBD play Cellular Goods (CBX), which has just floated and effectively is at the drawing board stage, has a market cap of £50m. In contrast, Love Hemp (LIFE), which has a high-end range of CBD products already retailing through Boots, Ocado, and Holland & Barrett, is currently valued at £25m. Indeed, it could be argued that Love Hemp is as far, or further down its particular strategy in the UK than Zoetic International (ZOE), which is currently valued at £170m.
Medical Cannabis: Ananda Developments (ANA)
It may be for some that the area of Cannabis which suits their investment mindset is the medical side. Certainly, we have seen the recent newsflow at Ananda Developments (ANA) underline this idea as there has been a very positive response since the company raised £300,000 to construct Phase One of the medicinal cannabis growing research facility in Lincolnshire, subject to the Home Office issuing a licence to grow medicinal cannabis for research. The kicker here is that Ananda’s joint venture partner, JEPCO, will manage the growing of medicinal cannabis under the same protocols it did for multi billion dollar group GW Pharmaceuticals from 2014 – 2017. Shares of Ananda being up 600% in Q1 2021 implies that the concept has been appreciated by the market.
And The Winner Is: Quetzal Capital (QTZ)
It would be surprising if Aquis did not reflect the trends we are seeing in the financial markets. Indeed, to see digital assets and cannabis feature in the list of YTD winners on the exchange is just as one would expect. It is also not too much of a shock to see a SPAC (special purpose acquisition company) at the top of the table in the form of Quetzal Capital (QTZ), where the shares are up 1,000% in the wake of a £3m placing at 4p to give it the financial bandwith to look for investments or be a reverse takeover candidate. In many ways Aquis is the perfect place for a SPAC, if only in terms of cost and ease of set up. If you add in trading volume interest provided by “one man stock market” Chris Akers – a serial entrepreneur, and it can be said that the Quetzal model could be replicated again and again on this exchange. If there is another name change at “Ackwis / Ayquis”perhaps calling it the London SPAC Exchange might work?
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