ASX Small Caps Lunch Wrap: Who officially finished third in The Great Space Dick Measuring Derby last night?
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The ASX opened with a dip this morning, before recovering to be at +0.3% in the first 20 minutes of trading today.
However, the market’s usual post-lunch slump appears to have arrived a little earlier than normal, with the benchmark ASX 200 falling to be pretty much back where it started… Pancakes for lunch it is, then.
Moving on, however, to the most interesting news story of the day. Richard Branson has officially placed third in The Great Global Dick Measuring Derby, leaving only Elon Musk and Jeff Bezos left to punch each other round the ring.
And also shoot rockets into the sky, because that is a perfectly normal and healthy thing for ultra-rich men to do.
I’m writing, of course, about the unfortunate circumstances that have seen Virgin Orbit laying off 85% of its workforce and filing for bankruptcy, news that sent its share price plummeting 23% overnight.
CNBC’s Michael Sheetz has done an amazing deep-dive into what went wrong – but it’s super-long and takes ages to read, so here’s a somewhat abridged version for you, because I know you’re all very, very busy.
Virgin Orbit was founded on 07 March, 2017, a scant 15 years (almost to the day) after Musk’s SpaceX, which itself is preceded by Jeff Bezo’s effort in September 2000.
In that time, the following stuff happened:
So immediately, you should be able to see what the problem is: With SpaceX focussing on flying actual big things into space, and Blue Origin focussing on heaving celebrities into orbit, the only gap in the market was for small, quick launches.
Lots of little rockets = one huge rocket. It’s basic maths – something Virgin Orbit CEO Dan Hart might not be very good at.
When the company started, it said it would have its first rocket in the sky in 2018, and through epic management skills and the hard work of people who are actual rocket scientists, the company fired something into the air just two-and-a-bit years behind schedule.
With a roar of its mighty rockets ringing out, it promptly exploded.
Undeterred, the company burnt through enough money to buy even more teeth for Richard Branson’s smile – but it wasn’t enough to get the company’s rockets to do much at all.
The plan was for the company to launch seven rockets in 2022, and then increase the frequency of its launches to meet soaring demand. Instead, it launched two.
In a sign of things to come, Virgin Orbit changed tack and decided to launch its latest effort from the UK, rather than in the US.
And, with a roar of its mighty rockets ringing out, it also promptly exploded.
And this week, the company looks like it’s set to share the fate of its initial launch, soaring briefly before detonating in glorious shower of debt, and regret – possibly wiping that horrifying rictus grin off Branson’s face until he can scrape enough money together to get another supermodel to gaze adoringly at it. While parasailing nude together, or something.
And speaking of failing to launch, let’s go take a look at what the ASX is doing.
At lunchtime today, the ASX 200 benchmark is about as flat as the front of my Speedos, at -0.02%.
A combination of cold water and the cruel lottery of genetics meant that I never stood a chance in the The Great Global Dick Measuring Derby – that, and I don’t have a few spare billions to build a rocket – so I never bothered to enter.
Anyway… a look at the sectors shows a well-mixed bag, with 6 up and 5 down. It’s the Telcos at the happy end of proceedings, up 1.1%, followed by Health Care (+1.0%) and InfoTech (+0.75%).
Once again, the Materials sector is having a shocker, down 0.7%, But today, it’s got Energy (-0.4%) and Real Estate (0.35%) nearby to keep it company.
Up the top end of town, goldies De Grey (ASX:DEG) and Bellevue (ASX:BGL) are putting in a solid day’s work, up 6.25% and 7.57%, driven higher by spot gold prices nearing record highs, back over the magic US$2000/oz mark.
In the US, the S&P 500, the Dow Jones and tech-heavy Nasdaq indexes all closed around 0.5% lower overnight, ending a four-day rally after another selloff in bank stocks.
Earlybird Eddy Sunarto reports that chairman and chief executive officer of JPMorgan Chase, Jamie “I look like a US knock-off of Xi Jinping” Dimon warned the US banking crisis will be felt for years.
“The current crisis is not yet over, and even when it is behind us, there will be repercussions from it for years to come,” said Dimon, while reclining on the enormous pile of dollar bills he (allegedly) keeps in his office for emergencies.
Like a bank collapse, or if a Greyhound bus full of strippers happens to break down outsdide the office. It pays to be prepared.
In Japan, the Nikkei has sunk by 1.3% this morning, and in Hong Kong the Hang Seng is down 0.66%.
Meanwhile in China, Shanghai markets are up 0.5% – the only major index in the world that’s climbing at the moment – possibly because they’re trying desperately to make a good impression on French leader Emmanuel Macron, who is arriving in town today, Stockhead’s unstoppable Christian Edwards reports.
Macron’s only in China to escape two things. One, a furious population rioting in the streets over the French leader’s “captain’s pick” over raising the retirement age in France by two years.
The second is his missus, who is most likely incandescent with rage that if he keeps going with his retirement age reform, she’ll have to go back to work because she’s super-old.
Here are the best performing ASX small cap stocks for April 5 [intraday]:
Swipe or scroll to reveal full table. Click headings to sort:
|CLZ||Classic Min Ltd||0.0015||50%||47,994,500||$2,437,440|
|DTM||Dart Mining NL||0.064||25%||2,192,253||$7,936,649|
|IVR||Investigator Res Ltd||0.048||17%||16,966,327||$58,923,807|
|LLO||Lion One Metals Ltd||1.08||16%||14,960||$11,168,336|
|ATH||Alterity Therap Ltd||0.008||14%||2,227,317||$17,079,283|
|TAS||Tasman Resources Ltd||0.008||14%||100,246||$4,988,685|
There’s a very clear winner this morning, and that’s Western Mines Group (ASX:WMG), which has announced the discovery of an extensive nickel sulphide mineral system throughout the Mulga Tank Ultramafic Complex.
WMG has pulled up a cumulative 693.5m at 0.28% Ni, 128ppm Co, 61ppm Cu, 27ppb Pt+Pd in one drill hole at Mulga Tank, with other holes confirming an “extensive nickel sulphide system” with similarities to the large Mt Keith orebody.
WMG is trading more than 90% higher for the morning, because nickel is currently in the process of replacing copper as the new lithium.
4D Medical (ASX:4DX) is also making significant gains this morning, up 39.8% on news that it’s just signed a five-year contract with the University of Miami to provide XV LVAS (X-ray Velocimetry Lung Ventilation Analysis Software) ventilation reports.
The contract comes after a successful long-term clinical trial program already underway at University of Miami – and, given how freakishly expensive health care is in the US, 4DX’s official entry into the market there has money-spinner written all over it.
Argent Minerals (ASX:ARD) is highly likely to get a Please Explain postcard from the ASX at some point today, after rocketing up 27.2% despite not issuing a peep of news since the company’s somewhat mediocre half-year report on 15 March.
But something must be happening for ARD – the climb is on the back of a 4x jump in volume against its four-week average.
Here are the worst performing ASX small cap stocks for April 5 [intraday]:
Swipe or scroll to reveal full table. Click headings to sort:
|AVW||Avira Resources Ltd||0.002||-33%||24,857||$6,401,370|
|VPR||Volt Power Group||0.001||-33%||100,000||$16,074,312|
|WEC||White Energy Company||0.11||-21%||6,024||$5,679,701|
|OJC||The Original Juice||0.1||-17%||11,266||$29,350,895|
|FDV||Frontier Digital Ltd||0.595||-14%||1,139,553||$263,758,978|
|SHN||Sunshine Gold Ltd||0.013||-13%||181,338||$11,545,841|
|REZ||Resourc & En Grp Ltd||0.014||-13%||939,162||$7,996,893|
|ADC||Acdc Metals Ltd||0.115||-12%||37,420||$6,077,175|
|CII||CI Resources Limited||1.08||-11%||16,000||$141,008,951|