I’ve had a bunch of requests this past week for information on two companies we’ve covered in the last few weeks, more than any other. That’s not unusual, sometimes companies hit a rich vein of investor interest for no apparent reason, and potential investors, rather than jumping in on faith, contact folks like me to explain what’s really going on.
Here’s the thing: I have no idea.
That’s not true, I have an idea, but not a lot of insight I can share.
Here’s what we know:
Calyx Bio-Ventures (CYX.V) has been saying, for a few weeks now, they’re working on something crypto-blockchain related that involved the online e-commerce messaging platform (think Slack but with a sales pipeline) they’ve been developing for a while now.
They’ve said it inelegantly, granted. The news releases they have put out haven’t explained as much to do with their operations as they have how blockchain and crypto work, but CEO Roger Forde has long countered that he doesn’t want to play the hype game, and that when he has something to tell, it’ll be big enough to warrant your interest.
I took a call with Forde on Friday in which we discussed, under an NDA, some of what he’s planning to do. I don’t mind revealing that, based on that discussion, some plans may have increased in scope and been hastened. I can’t tell you what his plans were, or are, but I can confirm the answer to a question I’ve been asked by a few people just today regarding Calyx by saying, yes, there are actual plans and deals being formalized.
Forde is not a promoter by any stretch, which is clear by looking at his news flow over the last year, but he is a bona fide tech guy and is driven very much by a notion that he needs to prove himself to the market, after a few years of sluggish Calyx performance on the exchange, and a couple of pivots.
Some issues discussed that I can talk about, because they’re not going to happen, include rolling back the stock and going for a big money raise at the current share price. Neither are likely, the latter only likely to occur if a large acquisition is in the offing.
That’s the evidence you need, if you need any, that Forde isn’t playing the Venture game of running hard on a sector wave, with no view to building a real company. Like HIVE Blockchain (HIVE.V) pulling the ripchord on their huge run last week by making additional shares available on the open market, thereby dulling a run that looked bound for $10, Calyx has had every chance to ride the blockchain wave and let Brokerage X and Y raise a ton of cash for them and figure out later what they’re going to do with it, and has instead preferred to go organically, and leave his stock in the penny range to allow long holders to benefit from any upward shift.
The ride has been long. But it has also been profitable. From $0.045 in mid September, CYX has gone as high as $0.14 of late, currently sitting on $0.115.
Volume, both buying and selling, has been distinctly busier during those two months, with some of that selling being as a result of a small private placement financing at $0.07. If you got in at the previous $0.05 round, sold at $0.12, and rebought for $0.07 as the market moved to $0.12 again, you’re doing okay.
But all of that action has been in play while Calyx itself has been the stockmarket equivalent of a loot crate; open it and you might find nothing, or you might find something neat. You don’t know right now – but the market is leaning on there being some ‘there’ there, going by the stock activity.
The CYX market cap currently sits at $7 million, which, should they announce real crypto-blockchain plans, will disappear quickly into our distant memories, and it won’t require much buying for that to be the case. On CYX’s busiest trading day of late, it only took $300k of stock trading to move the share price 20%.
Similarly, the other company we’ve been asked about a chunk of late is Damian Marley’s Stony Hill (STNY:OTC). The marijuana company that took a piece of High Times magazine, and the celebrity founder who supported Jay-Z on a recent album and stadium tour, bring a real celebrity deal to the fore of the weed space, rather than a licensing fee to use someone’s name selling the same old ganj’ you used to call Purple Rage Banana Kush.
To be sure, STNY’s deals to date have been largely small, and if you’re investing based on current revs, the weed market probably isn’t for you as a whole, let alone Stony Hill.
But STNY has one thing going for it that makes it intriguing, even before its formative news releases and deals have dropped; it’s TIGHTLY held, and thus moves HARD in whatever direction it’s going.
Google Finance shows it having 15.4 million shares out, which is anemically small for an OTC vehicle, where $0.0001 stock counted in the billions is not a rare thing.
STNY moved up $1.76 to $2.80 a few days ago, and touched $3.00 today – and it’s doing that on incredibly low volume – averaging just 1500 shares traded a day.
Riddle me this: If STNY drops a news release of substance any time soon and gets a million or so shares traded – or even 10,000 – what does that do the share price?
As always, the OTC deals show far more volatility than Canadian deals because of the crazed fever dream that can be the OTC message boards, Twitter touts, and cross-pollinating deal-making that goes on. This goes in both directions, to be sure, so keep your head on a swivel – but is it more likely that a celebrity-led deal will be a garden variety pump, that leaves said celebrity having to explain himself to the media and fans who lost their dough, or that he’ll ensure deals are done that leave his burgeoning singing career and reputation on the rise as a result?
Your average OTC deal with largely anonymous execs and insiders has little need beyond staying clear of the SEC to not pull a swifty or two, but an OTC deal with a legit celeb in the control room is a different beast.
Heck, Marley isn’t just sitting on the board of Stony Hill, he’s putting out songs around it – he even named his recently released album after it. An album which dropped at #2 on the Billboard Reggae charts, at that.
This, of course, doesn’t make success assured. Do your due diligence and cast a hairy eye on anything you’re told on the OTC, but also understand the way the market works when a company that’s running up on no news, actually gets news.
Never ever place your bank entirely on a guess, even if that guess has been on the rise, but a side bet on something that has the feint whiff of renaissance can sometimes have high upside.
To be clear: Both companies are now Equity.Guru marketing clients, which is why our attention is on them rather than the 6000 other companies on the Canadian exchange, and god knows how many more on the OTC, but both companies have been told in no uncertain terms – if they fudge things, we’ll talk about it openly. The pressure is on them to deliver as promised.
That said, we like that early movement they’re showing, even if they both have plenty left to prove.
Watchlist. Don’t go nuts just yet… but watchlist.
— Chris Parry
FULL DISCLOSURE: Stony Hill and (as of today) Calyx Bio-Ventures are Equity.Guru marketing clients. The author has bought into Calyx’s recent private placement financing, and is a shareholder in HIVE.
NB:
1. Pursuant to a resolution passed by the directors dated Nov. 27, 2017, Calyx Bio-Ventures Inc. changed its name to Calyx Ventures Inc. effective as at Feb. 5, 2018. The ticker symbol CYX is unchanged.
2. BEVERLY HILLS, CA / ACCESSWIRE / March 7, 2018 / Stony Hill Corp. (OTCQB: STNY), a diversified cannabinoid therapeutics company focused on the medical, bioceutical, and pet health industries, announced today that it will change its name to Applied BioSciences Corp., to better reflect the focus and resources of the Company.