Since the GFC in 2009 the markets have entered a new era, risk aversion. Today's investor not only wants a return on investment but more importantly want a return of investment.
That being said the luster of rising gold prices and monetary stimulus from 2010 to 2012 saw the resurgence of some risk capital return to the Venture Exchange. Many new juniors have gone public and flooded the markets with marginal management and marginal properties all in the hopes of cashing in on the retail investors risk appetite.
Risk capital is the arteries of the Venture Exchange and the retail investor is the life blood. This life blood has been drained away leaving the Venture Exchange at serious risk in 2013 and for many years to come.
It has been documented recently at Kaiser Research Online that 632 junior companies with less than $200,000 in working capital are at risk of being de-listed. These stats were as of June 2012 and Kaiser believes today, the stats are closer to 1000.
Harbingers were plentiful at the past Cambridge Show, from the sorrily missed booth babes to free giveaways and the lack of the ever so popular business card draws for swag.
Talk on the floor at the Cambridge show centered around other industry shows in Chicago, New Orleans and San Francisco that were complete flops. Booths at the Vancouver show were half price or in some cases free. Most attendee's on Monday seemed to be industry players.
Even more telling is the statistics that the TMX Group release, these stats clearly show a peak in 2011 with significant declines for 2012.
More foreboding financing stats listed below, total financing's were down 41% YOY from 2011 to 2012. The first month of 2013 witnessed an even larger drop in financing's with drop of 51.4% from a year earlier. There is an old market saying "As January goes so does the market for the year", 2013 is not going to be a good year in the junior space.
It has reached such a crescendo that other long time Venture Market traders have pulled the plug on this exchange, including myself with a few exceptions.
The current state of Venture Exchange will have a massive effect in Vancouver where brokers and industry players rely on fresh capital to sustain a lifestyle. Maybe after the cleansing occurs risk capital will return, not to sustain a lifestyle for the promoter but to create spectacular return for the risk taking investor.
Does the Venture Exchange really need 2567 listed companies? No. When 1000+ companies get purged from this exchange then maybe health will return to this market.
Until then millions of dollars of investor capital has been squandered, creating nothing but a tax loss for Joe Public.
That being said the luster of rising gold prices and monetary stimulus from 2010 to 2012 saw the resurgence of some risk capital return to the Venture Exchange. Many new juniors have gone public and flooded the markets with marginal management and marginal properties all in the hopes of cashing in on the retail investors risk appetite.
Risk capital is the arteries of the Venture Exchange and the retail investor is the life blood. This life blood has been drained away leaving the Venture Exchange at serious risk in 2013 and for many years to come.
It has been documented recently at Kaiser Research Online that 632 junior companies with less than $200,000 in working capital are at risk of being de-listed. These stats were as of June 2012 and Kaiser believes today, the stats are closer to 1000.
Harbingers were plentiful at the past Cambridge Show, from the sorrily missed booth babes to free giveaways and the lack of the ever so popular business card draws for swag.
Talk on the floor at the Cambridge show centered around other industry shows in Chicago, New Orleans and San Francisco that were complete flops. Booths at the Vancouver show were half price or in some cases free. Most attendee's on Monday seemed to be industry players.
Even more telling is the statistics that the TMX Group release, these stats clearly show a peak in 2011 with significant declines for 2012.
More foreboding financing stats listed below, total financing's were down 41% YOY from 2011 to 2012. The first month of 2013 witnessed an even larger drop in financing's with drop of 51.4% from a year earlier. There is an old market saying "As January goes so does the market for the year", 2013 is not going to be a good year in the junior space.
It has reached such a crescendo that other long time Venture Market traders have pulled the plug on this exchange, including myself with a few exceptions.
The current state of Venture Exchange will have a massive effect in Vancouver where brokers and industry players rely on fresh capital to sustain a lifestyle. Maybe after the cleansing occurs risk capital will return, not to sustain a lifestyle for the promoter but to create spectacular return for the risk taking investor.
Does the Venture Exchange really need 2567 listed companies? No. When 1000+ companies get purged from this exchange then maybe health will return to this market.
Until then millions of dollars of investor capital has been squandered, creating nothing but a tax loss for Joe Public.
Nice job. The days of raising cash for hookers and blow for Vancouver Vultures appear to be over. At least for now.
ReplyDelete