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Weekly Cache

Weekly Investment News and Analysis

Please see what we’ve been reading in technology and ESG related investing this week. Please feel free to send us what you’ve found interesting.

Latest Invesment News

July 7, 2024: Positive Week For Major Indices

Last week, Dow Jones rose 0.7%, S&P 500 1.95% and Nasdaq composite 3.5%. Alameda-Backed miner, Genesis Digital Assets is weighing a US IPO — GDA traces its roots to one of the earliest crypto mining companies and received over US$1 billion worth of investment from the venture arm of Alameda Research. Northern Data is weighing its AI unit’s IPO at up to a US$16 billion value amidst some valuation controversy. Britain’s Revolut surged to a record profit as it seeks a US$40 billion valuation. SoftBank is discussing with banks how to fund investments of up to US$10 billion in energy-related projects, as artificial intelligence drives an enormous increase in demand for power. Tesla’s vehicle deliveries fell for the second quarter in a row but beat Wall Street’s estimates, sending the electric car maker’s stock up more than 8% to its highest price since January. Apple said on Friday it has approved Epic Games’ games marketplace app on iPhones and iPads in Europe. Amazon founder and executive chair Jeff Bezos plans to sell about US$5 billion worth of his stake in the company, his second major round of share sales this year. A U.S. stock rally supercharged by excitement over artificial intelligence is drawing comparisons with the dotcom bubble two decades ago, raising the question of whether prices have again been inflated by optimism over a revolutionary technology. However, tech stocks are more modestly valued now than at the peak of the dot-com bubble, trading at 31 times forward earnings, compared to as high as 48 times in 2000, according to Datastream. OMERS entered into an agreement to sell medical testing company LifeLabs to Quest Diagnostics for $1.35 billion. Canada enacted a Digital-Services Tax amid risks of a U.S. trade retaliation.

Invesment News in the Past Weeks

May 09, 2021:Busy Canadian capital markets week, as global chip shortage continues

May 09, 2021:Busy Canadian capital markets week, as global chip shortage continues

After a few quiet weeks, last week was once again very strong from a Canadian capital markets perspective. Nearly a billion dollars of Canadian VC funding was announced, with a lot of attention on Wealthsimple’s $750 million financing. Canadian innovation public markets have also been very robust, with recent IPOs by Thinkific, Magnet Forensics and listings by Taiga Motors, and InterCure. In the USA, the Apple – Epic lawsuit continues to reveal very interesting data points, while the global chip shortage continues to persist. Lastly, Bitcoin is expected to become available to customers of hundreds of banks in the US this year, as crypto custody firm NYDIG has teamed up with fintech company Fidelity National Information Services, in a move which could be very interesting for the cryptocurrency.

May 02, 2021:Busy earnings week, robust Canadian VC activity, and increasing scrutiny of Chinese tech giants

May 02, 2021:Busy earnings week, robust Canadian VC activity, and increasing scrutiny of Chinese tech giants

Last week, was full of corporate earnings, with plenty of high-profile companies reporting their quarterly results. Our favourite stock from our sell side equity research days, Shopify (SHOP-NYSE, SHOP-TSX), reported a monster quarter, in what is typically a seasonally soft period. We recently had a conversation with the Morning Brew on Shopify’s evolution and success during the COVID pandemic, as the company appears to be at a crossroads. Canadian VC backed firms, had an extraordinarily strong week with regards to fund raising, with news by Sonder, Vena, and Clio. Multiple Chinese tech giants seem to be coming under increasing government scrutiny, while Apple’s much anticipated iOS 14.5 was made available, which could cause some dislocation in the ad-tech ecosystem.

April 25, 2021: Likely the most subdued week in Canadian capital markets after a intense few months

April 25, 2021: Likely the most subdued week in Canadian capital markets after a intense few months

This past week was perhaps the most subdued in the past few months in Canadian tech and clean tech capital markets activity. After a few months of intense activity, we’re not too surprised. Within Sophic clients, AnalytixInsight (ALY-TSXV, ATIXF-OTC), made a very significant announcement of a product launch by its 49% owned unit, MarketWall, with Intesa Sanpaolo, a major European bank. As well, Sophic spoke with Ayre Group Ventures about Sophic Client, Mijem (private) and Bitcoin SV. New listings in the USA, were relatively quiet as well. Coinbase, according to some is being classified as a “broken IPO”, disregarding the reference price. We are intrigued by Discord, and Microsoft no longer being in M&A discussions, likely suggesting Discord go public.

April 18, 2021:Canadian capital markets excited for a couple IPOs

April 18, 2021:Canadian capital markets excited for a couple IPOs

Our Canadian capital markets and buy-side contacts are excited about upcoming Thinkific and Magnet Forensics IPOs. At the same time, investors remain somewhat cautious with regards to deploying capital towards smaller cap deals, as many strongly performing small cap stocks are down ~40-60% from highs set in mid-late February. Investor response to some highly anticipated US new listings, such as Coinbase and TuSimple was tepid as well. That said, shares of newly listed Esports Technologies Inc. have performed very well as investors continued to cheer the public debut of the Las Vegas-based online gambling company. The company provides esports wagering products and technology. Investors can also play this theme via Sophic Client LuckBox (LUCK-TSXV, LUKEF-OTC) and the adjacent esports community theme via soon to be publicly listed Sophic Client Swarmio.

April 11, 2021: Canadian capital markets have a better week following recent turbulence

April 11, 2021: Canadian capital markets have a better week following recent turbulence

After a few weeks of relatively muted capital markets activity, this past week witnessed a bit of on uptick in innovation sector related public market financings. That said, private markets activity was very robust as well, exceeding public market financings. We’re encouraged with the level of support Kneat (KSI-TSXV) has received from investors; a stock we covered for a few years as sell side equity analysts. Sophic Client, AnalytixInsight (ALY-TSXV), could benefit from anticipation of its MarketWall unit’s business-to-consumer user growth at Intesa Sanpaolo alone. We published a research piece highlighting our conservative estimate of what every 100,000 MarketWall users could add to AnalytixInsight’s share price. We also investigate how the stock could benefit when analyzing potential revenues generated by users. Another Sophic client, Mijem (private) announced an investment by noted technology entrepreneur Calvin Ayre, founder of venture capital firm Ayre Group Ventures and blockchain conglomerate CoinGeek. In the USA, Coinbase released monster Q1/21 metrics ahead of a highly anticipated direct listing this coming week. Following suit, cryptocurrency exchange Kraken, could go public as well. We are also looking forward to the public markets debut by Topps, Grab, and Didi.

April 04, 2021: Relatively muted holiday shortened capital markets week in North America

April 04, 2021: Relatively muted holiday shortened capital markets week in North America

The holiday shortened past week saw muted capital markets activity in public equity markets in Canada and the USA, on the heels of a turbulent few weeks. In Canada, Sophic Client, AnalytixInsight (ALY-TSXV, ATIXF-OTCQB) announced a transformative regulatory approval as an online financial broker by the Italian financial markets regulator. As a result, the platform will allow users to trade stocks, options, and derivatives in Italy and later in other European countries. Quisitive (QUIS-TSXV) announced a major acquisition in the financial services vertical. In the USA, we’re looking forward to Coinbase’s direct listing in mid-April. The Invesco Solar ETF (TAN-NYSE), had a strong finish to the week following Biden infrastructure plan, as did Sophic client, UGE International (UGE-TSXV, UGEIF-OTC).

March 28, 2021: Canadian capital markets see slight uptick, even as North American investors exhibit price sensitivity

March 28, 2021: Canadian capital markets see slight uptick, even as North American investors exhibit price sensitivity

After a few weeks of volatility in Canadian capital markets, last week saw a bit of an uptick in activity. That said, we’re hearing investors are pushing back on some richly valued new issues. We’re excited to see MDA (a Canadian company we’ve known as 15 years as sell side equity analysts) could be a public company once again. In the USA, Robinhood has filed confidentially for a US IPO. Both Robinhood & SoFi have indicated they will let retail investors buy into IPOs. We’re also watching Coursera’s IPO, as many influential investors COVID could forever change education. WeWork could go public via a SPAC. In the US too, recent IPO debuts by Vizio and DigitalOcean suggest investors could be more price sensitive with regards to new issues than in the past few months.

March 21, 2021:Relatively quiet week in Canadian growth sector capital markets, but pipeline remains very busy

March 21, 2021:Relatively quiet week in Canadian growth sector capital markets, but pipeline remains very busy

Given market volatility in the technology and growth sectors over the past few weeks, this last week saw a muted level of new growth sector equity financings in Canada once again. That said, new offering pipelines appear healthy, and our contacts at various investment banks suggest there could be up to ten newly minted tech companies in Canada relatively soon. Sophic client, AnalytixInsight (ALY-TSX), could be an interesting stock to watch over the next few weeks, as the company could benefit from increased retail investor trading globally – the company, last week, also announced a new ESG focused offering. In this regard, we are also watching eToro’s SPAC in the USA, as well as public debuts by Deliveroo, Coinbase, Stripe.

March 14, 2021: Expect Canadian tech & clean tech capital markets to remain exceptionally busy

March 14, 2021: Expect Canadian tech & clean tech capital markets to remain exceptionally busy

As market volatility continued early last week after tumultuous trading the previous week, our discussions with our capital markets contacts suggest new issue pipelines remain exceptionally busy, which, in our view, bodes well for public markets relating to Canadian tech and clean tech. In the Canadian small cap space, we were encouraged to witness Sophic Client Luckbox (LUCK-TSXV), and separately, EMERGE Commerce (ECOM-TSXV) both close recently announced upsized financings. We’re also eagerly anticipating Telehealth provider Dialogue’s IPO. With Bitcoin hitting US$60K over the weekend, we expect crypto to remain an active theme globally. In the USA, Roblox and Coupang, both had strong public market debuts last week, as generally expected.

March 07, 2021:Market volatility causes Canadian capital markets speed bump

March 07, 2021:Market volatility causes Canadian capital markets speed bump

After three successive weeks of extraordinarily strong capital markets activity by the Canadian technology and clean tech sectors, this past week was impacted by ongoing market volatility as we expected last week. Public markets equity raises were under $100 million by our count. We are keeping an eye out on the performance of TAAL (an interesting Bitcoin SV play) and General Pizza (our due diligence found the pies to be delicious!). In the USA, we’re eager to see public debuts by Coupang, Instacart, Rocket Lab and Cipher in coming weeks/months.

February 28, 2021:Another Strong Week for Canadian Capital Markets, Market Volatility Near Term Speedbump

February 28, 2021:Another Strong Week for Canadian Capital Markets, Market Volatility Near Term Speedbump

After two consecutive weeks of extraordinarily strong capital markets activity by the Canadian technology and clean tech sectors, with total public equity fundraising announcements of around $2.5 billion. That said, recent market volatility could temper upcoming near-term activity as investors digest recent new issues and grapple with increased market fluctuations. In the USA, we look forward to upcoming public market debuts by Coinbase, Robinhood, Roblox and Toast.

February 21, 2021: Canadian Capital Markets’ Strong Run Continues

February 21, 2021: Canadian Capital Markets’ Strong Run Continues

After our last weekly update, highlighted a very busy week for Canadian capital markets, last week was extremely busy as well, coming in at around $900 million in public markets equity transactions. Amongst our client list, Sophic client, Luckbox (LUCK-TSXV) announced a $5 million equity financing, which was raised to $15 million owing to strong investor demand. The launch of the second-ever bitcoin ETF just days after approving the first crypto fund, in Canada (EBIT-TSX & EBIT.U-TSX) received considerable attention. In the USA, Coinbase was reportedly valued above US$100 billion, ahead of a direct listing. SpaceX raised ~US$ 850 million at a ~US$75 billion valuation.