Ruin Within 12 Months
As we know the fear among Conservatives was that the July 4 General Election would lead to a Labour supermajority and a government in power for 10 – 15 years. As we now know, the “no higher taxes for “working people” promise, turned into “let’s freeze pensioners (non working people) this winter.” We have also had the open border riots, and have a “painful” budget to look forward to. This leaves my assurance to tearful Tories in July of the new government not lasting a year, appearing not quite as preposterous as at first glance. But perhaps rather than the government not making it to July 2025, it could be that “two tier, free gear” Kier Starmer is the one looking like a dead man walking as far as making it to next summer. In fact, there are echoes of George V, when he said of his son, the future Edward VIII, that he would ruin himself within 12 months. That only took 11 months.
The England Manager
Perhaps in the case of Prime Minister Starmer, it is more about the damage to the country rather than himself. At the same time, and after so many Prime Ministers in recent years, we should consider how difficult the job is. Apparently, it is on a par with being the England football manager: almost whatever happens one is due hatred and vitriol. It may also be the case that as in the 1970s, we have become ungovernable. Possibly, even more ungovernable than then.
School Days
One of the best and worst things about the stock market, is that as the cliché goes, every day is a school day. During the week I learned that apparently no one is responsible for ensuring the good health of the stock market. For instance, the drought in IPOs and the continuous loss of listed companies, astronomic PLC costs and Kafkaesque red tape. But of course, if the stock market magically rebounded all and sundry would take the credit. It was and is noticeable, that shorters (and to be fair, regulators) who have killed the golden goose by their actions, continue to dance on the graves of small cap companies. The minnows, by definition, are the greatest victims of the demise of the stock market, something which will only accelerate with the new Marxist (not even Socialist) government.
KR1
I noted a couple of days ago a tweet by one of the leading UK stock influencers that he is mulling joining the stock market as he feels his investment track record would be a hit in the listed environment. My message to him, is good luck Sir. Rather like politics, the markets are something which look easy, until you are in the hot seat. For instance, all and sundry trade at discounts to cash and NAV. The horrific undervalue of KR1 (AQSE:KR1) underlines the plight of even the best investment companies.
Optibiotix / Probiotix
Optibiotix (OPTI) / Probiotix (AQSE:PBX) is currently a situation where it is perhaps surprising that the gravity of the position of OPTI has not been emphasised in the market more. The shares have more than halved since the mention in the Daily Mail’s Midas Column at the end of July. It would appear that there is much further to fall. Massive costs and minimal revenues mean that the company which hived off its golden goose, PBX, now clearly wishes it had not. Hence the “spat” between the two companies currently. At the current rate of cash burn c.£40k a month and revenues in line with your average whelk stall, one would expect OPTI to need a fresh fund raise by the turn of the year. At the current rate of share price decline, and with the market not responding to the “ramptastic” updates from the company regarding international counterparties, this is going to be very difficult.
Phoenix Copper
One of the stock rug pulls of the week was Phoenix Copper (PXC), in the wake of Thursday’s interim results. While those who are perhaps not as familiar with the company as they should be pointed to either admin costs, copper bond drawdown issues, or prospective M&A, for the share price fall. However, all of this speculation notwithstanding, at 11p the shares are not factoring the funding, the potential, and the value of what the company is sitting on. For the shares to be back near 4 year lows after all the work done is harsh even by current cruel stock market standards. This point is underlined by the bear trap on Thursday below 10p. One would not expect the sub 10p zone to be visited again.
Metals One
Another company feeling the wrath of the stock market on valuation is Metals One (MET1). The company which is advancing strategic minerals projects in Finland and Norway, as it announced that Edison Group has initiated equity research on the Company. Edison said that even on a reduced book value of 2.5p a share, the current share price of 0.5p is woefully low. It also pointed out that there is certainly no premium, indeed, the company is discounted on almost all parameters. This is especially the case in terms of the Finland jurisdiction, the book value, and the NPV. For Norway, the farmout to Kingsrose regarding Rana, is being treated as rather less than the potential 0.35p a share read across value. There is also the possibility that Rana could in the end be a bigger project than Finland’s Black Schist. The ideal scenario is that EU funding becomes the non-dilutive funding bonanza that the market is also not factoring in.
Coinsilium
With Bitcoin back up near the top half of its recent range at $65,000, it was timely for Coinsilium (AQSE: COIN) to release its interims on Friday. The Web3 investor, advisor, and venture builder saw its shares up 25%, as speculation grows regarding the anticipated launch of the Yellow token in Q4. It would appear that investors here are doing the math as far as the $200,000 early stage investment that COIN made in 2022, something that by implication could see a decent return for the company when Yellow launches. The chart suggests that the shares are ready to head back to the top of the range through 3p plus versus the latest close of 1.75p. Presumably, Bitcoin towards $100,000 by the end of the year would also do COIN shares no harm either.
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