ASX Small Caps Lunch Wrap: Who else is hunting for a unicorn today?
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It’s something that investors dream about finding, entrepreneurs fantasise about founding and little girls (and, quite disturbingly, more than a few gross, sweaty men) like to watch cartoons about.
We’re talking, of course, about unicorns, those magnificent beasts of mythology that are just horses with a spike on the front, but are also magical and stuff.
You’re more likely thinking of our industry’s definition of unicorn – those companies that are worth a fortune but aren’t listed on an exchange. You know, ethically fabulous and not even remotely problematic companies like Epic Games (makers of digital crack for kids, like Fortnite) and JUUL Labs (makers of literal crack for kids, like vapes).
But today, we’re going to take a look at one of the single greatest unicorns of all time, which – if you travel to Germany – you can see for yourself, in person. And learn a very important lesson about business, which we’ll share with you shortly. But first…
Waaaay back in the 1600s, a pile of crusty old bones was found in a cave near the mountain town of Quedlinburg.
News of the discovery reached the ears of one of Prussia’s pre-eminent Men of Science, Otto von Guericke, who was riding the wave of popularity and success, having recently invented the world’s first air pump.
Von Guericke, no doubt pleased with himself that he had invented the bicycle pump a mere 224 years before Irish inventor John Boyd Dunlop found a practical use for it by inventing the first inflatable tyre, took an interest in the bones and had them shipped to his laboratory.
There, he studied the bones, took measurements and pondered for months and, in a stroke of scientific genius, came to the obvious conclusion that the bones were those of a unicorn.
Inspired, von Guericke set about reconstructing the animal from the bones that he had, and birthed a monstrosity that honestly looks like someone was asked to make a sculpture depicting the scent of a dead wizard in a wet stable.
And thus, the Magdeburg Unicorn was born – despite being at least two legs short of being an actual unicorn, and the fact that the bones were clearly those of a Woolly Rhinoceros, which were a beast much like the far more famous Woolly Mammoth, only less mammoth and a lot hornier.
You can still see von Guericke’s monumental scientific failure on display, and it’s well worth making the trip to the Natural History Museum in Magdeburg, if only to learn the very important business lesson we promised you:
“If you reckon you’ve built yourself a unicorn, it’s best to actually do some due diligence before you go public.”
Aussie markets are off to a flyer this morning, jumping 44 points at the sound of the starter’s pistol and climbing further. As we head into lunch, the benchmark is up around 0.8% and trending towards a full 1.0% gain.
Consumer Staples (+1.75%), Health Care (+1.31%), Materials (+1.29%) and Telcos (+1.03%) are all well into positive territory for the morning, mostly undoing a lot of the damage they caused over the past week or so, but good on them for making the effort today.
Sadly, the Energy sector is badly in need of a recharge, heading into day 5 of a shocking form slump, down another 1.02% so far today as oil and gas prices continue to tumble and coal battles back from downturn earlier this month.
Topping the Top Hat Wearing stocks this morning was Pointsbet (ASX:PBH), which has added 6.5% to yesterday’s gains, after the company’s FY22 Results Conference Call – during which (we suspect) it was decided that the share price should go up, and not down.
Leading the Losers was Challenger Financial, putting in a performance reminiscent of its Space Shuttle namesake this morning after reporting a 57% Statutory Net Profit implosion which the market has given a -12% thumbs-down, with a side order of heartily-blown raspberries.
And Seven West Media (ASX:SWM) has fallen 6.73% after (rumour has it) Sunrise changed the brand of carwash wax they’ve been using on Kochie’s head, with the resulting glare blinding at least 20 pensioners before crew were able to fit stronger polarising lenses to the studio’s cameras.
And on that note, we’d best be off overseas before we get into any more trouble.
Looking overseas, and the big news came out of China yesterday after the Glorious People’s Central People’s Bank of the People of China People made surprise cuts to interest rates, moving the 7-day reverse repo rate from 2.1% to 2%, with another 10 basis point cut in its medium-term lending facility from 2.85 to 2.75%.
As Stockhead’s roving reporter Josh Chiat points out, it shows that the Chinese Communist Party is getting pretty concerned about its economic data and property market, coming after China’s credit growth numbers for July (RMB679n or around $142bn) came in around RMB450bn below Bloomberg estimates.
The US is also in a bit of strife, as Earlybird Eddy Sunarto reports, after the Empire State manufacturing index fell from +11.1 points to -31.3 points in August, while the NAHB Housing Market index fell from 55 to 49.
Despite the less-than-stellar numbers, Wall Street had a pretty good day. The S&P climbed 0.40%, the Dow added 0.45% and the Nasdaq techies piled on 0.62%.
In Asian markets this morning, and it’s more of the same, with Shanghai reacting to China’s rate cut by adding an uncharacteristic 0.23%.
Hong Kong has barely managed to squeak out a 0.10% lift and Japan’s Nikkei is flatter than a post-mix ginger ale from the bar at the Bourke Bowling Club, up 0.01% for the morning.
And over in crypto-land, Rob Badman reports that the party’s over for dog-based meme coins (for now, at least) after they spent the weekend – and I quote – “excitedly leg-humping their way into Monday”.
Bitcoin et al have also stalled this morning, and the US dollar could be set to rise, which could be bad for your crypto accounts. Read all of Badman’s excellent Mooners and Shakers crypto-gossip here.
Here are the best performing ASX small cap stocks for August 16 [intraday]:
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In the Land of Small Caps, where the good kinds of mushrooms grow, it’s Cobre (ASX:CBE) leading the tables this morning with yet another big copper find, this time a broad zone of visible copper mineralisation which extends over 69m (down hole) with 13m of abundant visual chalcocite mineralisation at its Ngami Project in Botswana.
Cobre shares spiked 30% so far this morning, after Cobre executive chairman Martin Holland noted that the new results extend the known footprint of mineralisation over more than 4km.
Oceana Lithium (ASX:OCN) has also surged, up 29% on no particular news, Gascoyne (ASX:GCY) went flying on news of a significant 59m @ 12.5g/t Au hit including 13m @ 51.1g/t at Dalgaranga, and Resource Mining (ASX:RMI) shot up 28.5% on no particular news as well.
And online retailer of everything you need to give your survivalist bunker a homelier feel while you wait 150 years for the nuclear fall-out to clear, Temple & Webster (ASX:TPW), has had a solid win this morning.
The company’s full year 2022 results announcement put a smile on the face and a spring in the mattress of investors, with a big revenue spike matched by its active shopper base climbing close to the magic 1 million mark sending its price up close to 20% this morning while we browsed for something comfy to sit on while we devour our brown-bag lunch.
On the red side of the ledger, 4DS Memory (ASX:4DS) has hit a major snag in its push to create new memory tech, announcing that “testing of the memory cells used in the imec megabit memory array showed unexpected problems with scaling the memory cell to small dimensions suitable for Storage Class Memory potential applications.”
It’s not good news for 4DS, which has been compounded by a 67% crash as investors stormed the exits.
And finally, the market has knocked the wind out of the sails for Cardno (ASX:CDD), which has been sliding since an unexpected surge on 08 August. That decline has accelerated somewhat this morning, with shares down 14%.
Here are the Not Best performing ASX small cap stocks for August 16 [intraday]:
Swipe or scroll to reveal full table. Click headings to sort: