Who Shoots A CEO?
This week brought the shocking news that the CEO of UnitedHealthcare had been shot dead in a targeted attack. Even more grim was apparently the way that some regard the as yet unfound, but filmed perpetrator as something of a folk hero. Of course, we have become hardened to more and more horrors of this nature over the years. 44 years ago, John Lennon, unquestionably a musical hero was shot dead, also in New York. At that time it seemed as unthinkable that a rock star would be shot, as a CEO today. It remains to be seen whether the murder of Brian Thompson was the traditional crazed, lone gunman, or perhaps a self-appointed Robin Hood figure.
Proud To Own Shares
The ongoing destruction / erosion of the London stock market continues, something we are reminded of in a good way, with M&A such as the likes of Direct Line (DLG), but generally in a negative way, as companies de-list. While some companies leave the stock market due to be taken over, the most obvious disaster is the lack of fresh blood to replace them. Given the compliance, increasing red tape, the cost, the undervalue (especially as compared to the US) and lack of liquidity, only those who need to have their head examined would currently come to market.
“Proud To Own Shares”
While the CEO of the LSE, Dame Julia Hoggett may insist that “people should be proud to own shares,” the question is why? So they can pay stamp duty, CGT, IHT and pay a spread when buying them that you could park a bus in? These are just some of the reasons why people have flocked to crypto. The heart of the problem is one that almost everyone, apart from those who remember say, the 1980s and before, do not remember what a booming UK stock market looks like. This was the world of the British Gas IPO, Tell Sid, and stagging. However, soon after the launch of AIM in 1995 the killjoys came in to spoil the fun: those who hate the idea of people making “easy” money on the stock market, and hate the “elites” of the City. Let us see whether Dame Julia, a former Financial Conduct Authority regulator can turn the tide. According to the fawning Sunday Times article today, she has rejected the idea that the London Stock Exchange should be spun off from the parent company: in this she is totally wrong as it is probably our only hope. Just as she is wrong to think that people will ever come back to shares (with Bitcoin at $100,000), or that companies will ever choose London over New York again. Oh yes, and how did the lobbying of the Chancellor ahead of the Budget go in terms of not taking measure to damage AIM still further? Not great, is the answer there.
MiFID
These killjoys also have the presumption that everything in the City is corrupt and greedy, and therefore should be regulated up to the eyeballs. This presumption is partly a factor of envy, and partly due to not understanding how the markets work. All of this has meant that City participants have been a definition of a boiling frog for the best part of 30 years. But the real pain came in when the EU sought to “level the playing field” between London’s leading position and the likes of Paris and Frankfurt. MiFID I was introduced in 2007 and MiFID II, two directives no one in their right mind in the UK would want.
The US vs London
But what is interesting about where we are now in 2024. There is a stark contrast between money flooding into the US markets after the Trump victory, and a trickle coming to London off the back of the Budget not quite being a suicide note for the LSE. Time and again one hears and reads those in and around the market crying for something to be done. What even the best or most informed of them do not realise, is that where we are has been by design, not by accident, or by complacency. It has been a deliberate policy, and one that started with the Blair years. It was then continued by what became the socialist Conservative government of 2010- 24, and of course we can expect the Marxist Labour regime to continue and even accelerate the job. And just in case one may be thinking that Rachel Reeves may not want to see the death of the London stock market, the real problem is that most of those working in this space from the regulators down, have no interest or wish for the City being an international leader. Quite simply, if they did, it would be as vibrant and world beating as it used to be, and as the US market now is.
EnergyPathways
Although much of the research that one does ahead of writing about the stock market is done on a laptop, the really juicy stuff comes from meeting / chatting to actual stock market participants, the brokers, stockbrokers and investors. This week I bumped into someone who I described at least a decade ago as “the best stockbroker in London.” To my mind, despite the dire state of the market, he is still a force to be reckoned with. Indeed, the conversation started with me moaning about the state of the market, but my stockbroker friend saying that it was not all bad, and that he has done very well in a particular stock. “EnergyPathways (EPP)?” I asked. “How did you know?” was the reply.
Apart from showing off my telepathic skills, I was rather hoping that EPP was the company my friend was involved in. The shares have more than quadrupled since October when a £5m facility was announced. The market remains divided as to whether the deal is too good to be true, EPP will be able to deliver its gas, or whether the collaboration with the government on hydrogen storage will get over the line in a timely manner. What can be said is that with the shares at just under 10p and with a £16m market cap, the company could easily raise £5m via a placing. This is particularly the case if the clients of “the best stockbroker in London” are on side.
Apart from my stockbroker friend, there is another person who I have watched progress over the past decade, to become one of the best private investors in London. Baron Investments (on X) was able to celebrate Ferrexpo (FXPO) as a massive Trump trade win, a stock which I have been charting since the start of the autumn. The shares have tripled since the lows in September near 40p. Indeed, this is one of those situations where one wonders whether it was a fundamental win, a charting win, or a mixture of both? From my perspective, it could easily have been just a technical buy, even though I tend to focus on the small caps. For instance, the Bulletin Board Heroes has featured Sealand Capital (SCGL) many times, and from well below 0.5p, and it has been a 6x winner in just a couple of weeks. Alas, given how difficult the microcaps are to trade in size, one would always prefer the midcaps as Baron Investments tends to go for.
This Weeks’s Risers
Apart from BBH knocking the ball out of the park with Sealand, and Baron winning big with Ferrexpo, there were other decent situations on offer. October 28th was the turning point for claim prevention tech group Ondo (ONDO) when it announced that it was expanding production capacity. That day they broke our first target at 17p, breaking the second target at 23p by the end of the month, third target at 33p last week. By Friday they were just half a penny off the fourth target at 40p, off the back of a fresh Danish deal during the week.
As far as the other winners on news were concerned, Celadon (CEL) jumped 40% on the week as a subscriber’s £150,000 belatedly turned up, and it wished its operatives a Merry Christmas. North Sea focused Orcadian Energy (ORCA) announced that it had acquired HALO Offshore UK Limited from the joint liquidators of Hague and London Oil plc. After what seems like an eternity, Quadrise (QED) appeared to actually get something over the line: “the transition technology provider for a cleaner planet” confirmed positive engine testing results for new bioMSAR™ prototypes, including its first with 100% biofuel. Also getting things over the line was Invinity Energy Systems (IES) a manufacturer of utility-grade energy storage, after it launched ENDURIUM™, the Company’s next-generation vanadium flow battery, for general sale.
Rising On No News
Of course, the best fun is always to be had from companies whose share prices have risen on no news. These are all the more significant on the London market given that we know that no one is really going to be buying shares unless there is something really compelling. Leading the way in this respect was Cel Ai (CEL) up 47%, which has had no significant news since board changes made at the end of June. Uru Metals (URU) delivered a 37% jump, while TinyBuild (TBLD) bounced 34%, both not having delivered significant RNS releases. Perhaps most intriguing of all to end the week was Neo Energy (NEO), which was up 26% on Friday, with fans of the stock hoping that Jason Brewer will deliver a significant deal imminently.
Resourcing Tomorrow
Finally, on Thursday I ventured down to the Business Design Centre, on the last day of Resourcing Tomorrow, which appears to have changed its name from Mines and Money. Fortunately for me, as I arrived mid-morning on the last day, most of the service providers who bombard unwitting CEOs for alleged PR / IR were not there. Apparently, they did their high pressure sales carpet bombing, offering discounted “deals” on days 1 and 2 of the event. So I did not have to mingle with the generally slimy used car salesman who occupy the space. That said, I did sit down and enjoyed listening to Greg Martyr, Executive Chairman of Capital Metals (CMET) present. He was riding high after announcing a one third Capex reduction on the company’s mineral sands project in Sri Lanka.
Author
