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Why exactly will 4d Pharma benefit from a NASDAQ listing?
What makes NASDAQ the catalyst, in my opinion which will drive a 4d Pharma re-rate?
An explanation:
Why exactly will 4d Pharma benefit from a NASDAQ listing?
What makes NASDAQ the catalyst, in my opinion which will drive a 4d Pharma re-rate?
An explanation:
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A) Higher overall trading volume:
According to the London Stock Exchange, AIM (where 4d is currently listed) has a market capitalisation of £104bn.
The equivalent figure for the NASDAQ is $17.2tn = £12.6tn.
Naturally, NASDAQ boasts far higher volume.
A) Higher overall trading volume:
According to the London Stock Exchange, AIM (where 4d is currently listed) has a market capitalisation of £104bn.
The equivalent figure for the NASDAQ is $17.2tn = £12.6tn.
Naturally, NASDAQ boasts far higher volume.
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The assumption is that investors notice 4d's valuation disrepancy with competitors (see below) and bid price up to 'fair value'.
https://twitter.com/BlogShrey/status/1347617057626587141
This doesn't have to happen, though. So, on to my next point:
The assumption is that investors notice 4d's valuation disrepancy with competitors (see below) and bid price up to 'fair value'.
https://twitter.com/BlogShrey/status/1347617057626587141
This doesn't have to happen, though. So, on to my next point:
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B) Biotech focus:
NASDAQ is touted as the 'biotech capital' of the world. It is the go-to for cutting-edge biotechnology firms to list.
The NASDAQ Biotechnology ETF $IBB is worth c. $10.6bn - almost the whole market capitalisation of AIM.
B) Biotech focus:
NASDAQ is touted as the 'biotech capital' of the world. It is the go-to for cutting-edge biotechnology firms to list.
The NASDAQ Biotechnology ETF $IBB is worth c. $10.6bn - almost the whole market capitalisation of AIM.
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This naturally implies that far more biotech-focused funds and private investors invest in NASDAQ companies as opposed to AIM ones.
The visibility of biotech is quite clearly greater on the NASDAQ.
Thus, greater opportunity for price discovery.
This naturally implies that far more biotech-focused funds and private investors invest in NASDAQ companies as opposed to AIM ones.
The visibility of biotech is quite clearly greater on the NASDAQ.
Thus, greater opportunity for price discovery.
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C) Fund positioning:
The very purpose of AIM is attracting innovative small companies through light-touch regulation & lower listing requirements.
This very factor is likely prohibitive for some funds, whose regulation may not let them invest in AIM.
C) Fund positioning:
The very purpose of AIM is attracting innovative small companies through light-touch regulation & lower listing requirements.
This very factor is likely prohibitive for some funds, whose regulation may not let them invest in AIM.
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A less woolly point is that dominant American funds tend to invest in America-listed companies.
The famous ARK Innovation ETF was 79.7% invested in American companies (overwhelmingly American listed) as of 31/12/20.
A less woolly point is that dominant American funds tend to invest in America-listed companies.
The famous ARK Innovation ETF was 79.7% invested in American companies (overwhelmingly American listed) as of 31/12/20.
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The BlackRock Future Innovators ETF carries with it a warning related to their investment in non-US equities.
It flows logically that US funds prefer to invest in US-listed companies.
4d is much likelier to see high institutional interest on NASDAQ.
The BlackRock Future Innovators ETF carries with it a warning related to their investment in non-US equities.
It flows logically that US funds prefer to invest in US-listed companies.
4d is much likelier to see high institutional interest on NASDAQ.
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D) Recent sector patterns:
The below thread explains that biotech is breaking out of a 5 year consolidation. Given AIM's small stature it is likely 4d will only participate in this once listed. https://twitter.com/saxena_puru/status/1345200630550302722
D) Recent sector patterns:
The below thread explains that biotech is breaking out of a 5 year consolidation. Given AIM's small stature it is likely 4d will only participate in this once listed. https://twitter.com/saxena_puru/status/1345200630550302722
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Now looking to the microbiome sector specifically, since 31/12/20 to 26/01/20 (ignoring yesterday's market-wide selloff):
Now looking to the microbiome sector specifically, since 31/12/20 to 26/01/20 (ignoring yesterday's market-wide selloff):
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4d Pharma is down c. 7.4%
Seres Therapeutics $MCRB is down c. 1.8%.
Kaleido Biosciences $KLDO is up c. 38.7%.
Evelo Biosciences $EVLO is up c. 35.2%.
There is a clear disrepancy between microbiome moves on AIM and on NASDAQ.
4d Pharma is down c. 7.4%
Seres Therapeutics $MCRB is down c. 1.8%.
Kaleido Biosciences $KLDO is up c. 38.7%.
Evelo Biosciences $EVLO is up c. 35.2%.
There is a clear disrepancy between microbiome moves on AIM and on NASDAQ.
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It is logical to expect 4d Pharma, given time, to participate in these moves.
Assuming no market-wide downturn, this implies a significant change in price movement from the current paradigm.
It is logical to expect 4d Pharma, given time, to participate in these moves.
Assuming no market-wide downturn, this implies a significant change in price movement from the current paradigm.
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To summarise, I expect 4d Pharma, ceteris paribus, to rise significantly post-NASDAQ listing based on:
- Higher volume on NASDAQ
- NASDAQ biotech focus
- Fund positioning
- Recent movements
Recent moves do not stress me - I have done my research.
To summarise, I expect 4d Pharma, ceteris paribus, to rise significantly post-NASDAQ listing based on:
- Higher volume on NASDAQ
- NASDAQ biotech focus
- Fund positioning
- Recent movements
Recent moves do not stress me - I have done my research.
