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ASX Zombie stocks, March 2023

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Dona Ferentes

Dona Ferentes

A little bit OC⚡DC
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Clearly, the collapse of Silicon Valley Bank in the good ol' U.S.A. will have ripple effects far and wide.

Tomorrow, Monday, our markets open earlier/ earliest, so it will be worth watching how asset classes perform. Mentioned elsewhere, the banking system will be under stress but central banks will act to minimise contagion . It may be messy but there is a pathway.

Technology is a different story. For start-ups, IPOs, high cash spend, those heroes of change are going to get hit. Quite a few won't be around for long as funding dries up.
 
So_Cynical said:
Tuesday could be a very good day to buy a Nasdaq ETF.
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Ah yes, the wonderful wacky world of ETFs, especially those designer 'active' ones, thrown together to follow a thematic, as tech and fintech and crypto and future facing stuff gained the spotlight.

We had a bit of levity in the thread that @peter2 started

RTCH - Inverse Thematic ETF​

but in all seriousness, there was a terrible reality of cynically cobbling together the issue of the day/ week/ month, and selling it to retail. Almost universally, the launch date was the peak or close to it, for these products. The only interest will be to see if they continue to fall in the next few days (pricing may take a while to filter through).

Stay tuned

(And, no, I do not hold a single one of the real ones mentioned. Never did, and definitely don't want to in the near future.)
 
I assume you're looking for newer tech IPOs that used capital provided by SVB and similar venture capital "banks".

I've been surprised by the low level of insured funds held by Citibank. I thought it may have been one of the significant US banks. It doesn't look like it.

The Waislitz pair TOP and TEK trade with a deep discount because the fees (espec. performance fee) are so large.

I consider that there's hundreds of "zombie" companies in the ASX. Companies that only exist to get to their next capital raise while mgt and directors are well paid for their time.
 
peter2 said:
I consider that there's hundreds of "zombie" companies in the ASX. Companies that only exist to get to their next capital raise while mgt and directors are well paid for their time.
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Most of the zombies are explorers, junior miners etc - maybe the current tech bust will be much like the mining bust of 3 or 4 year's ago? can we expect 20 or 30 junior tech stocks to go under?

Meanwhile im still keen on adding a Nasdaq index ETF to my portfolio, timing its all timing, long term big tech will be fine.
 
New Zealand tech company ikeGPS which is listed on the ASX, says more than a quarter of its cash was held at the collapsed Silicon Valley Bank.

As of 13 March, the company had a total of $NZ19.6 million ($18.2 million) in cash, of which around $NZ5.3 million ($4.9 million) was held at SVB


Life360 says its exposure to the collapsed Silicon Valley Bank is expected to be up to $5.6 million, but it will have no significant disruption to the company’s operations.
As of 10 March, 2023, Life360 had cash and cash equivalents of around $95.1 million, including $6.1 million in deposits with SVB, and $75.4 million in shares of money market mutual funds
 
Dona Ferentes said:
New Zealand tech company ikeGPS which is listed on the ASX, says more than a quarter of its cash was held at the collapsed Silicon Valley Bank.

As of 13 March, the company had a total of $NZ19.6 million ($18.2 million) in cash, of which around $NZ5.3 million ($4.9 million) was held at SVB


Life360 says its exposure to the collapsed Silicon Valley Bank is expected to be up to $5.6 million, but it will have no significant disruption to the company’s operations.
As of 10 March, 2023, Life360 had cash and cash equivalents of around $95.1 million, including $6.1 million in deposits with SVB, and $75.4 million in shares of money market mutual funds
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The dumbest of questions springs to my mind which is Why? What benefit did they achieve in having funds with SVB rather say ANZ? A warm, fuzzy feeling of supporting a tech bank maybe.
 
SiteMinder, Whispir, EBR Systems, LayBuy Group, Straker Transactions and Nightingale Intelligent Systems also have banking relationships with SVB , according to a report compiled by Ownership Matters.

These could be deposits, borrowings or a line of credit (& likely a combination of all 3)

Takeover target Nitro Software says around $US12.8 million of its global cash reserves are held on deposit at Silicon Valley Bank.

And unlisted Canva seems to be mentioned.
 
Dona Ferentes said:
SiteMinder, Whispir, EBR Systems, LayBuy Group, Straker Transactions and Nightingale Intelligent Systems also have banking relationships with SVB , according to a report compiled by Ownership Matters.

These could be deposits, borrowings or a line of credit (& likely a combination of all 3)

Takeover target Nitro Software says around $US12.8 million of its global cash reserves are held on deposit at Silicon Valley Bank.

And unlisted Canva seems to be mentioned.
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I notice it is confession time to the ASX. A number of notices from various listed companies on their exposure to SVB.
 
So_Cynical said:
Most of the zombies are explorers, junior miners etc - maybe the current tech bust will be much like the mining bust of 3 or 4 year's ago? can we expect 20 or 30 junior tech stocks to go under?

Meanwhile im still keen on adding a Nasdaq index ETF to my portfolio, timing its all timing, long term big tech will be fine.
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i disagree

i noticed several zombies lurking in tech , biotech and finance ( especially in the buy-now-pay-later area ) although not exclusively so

one might also watch some very small LICs as well for signs of holders fleeing also

should there be a rush away from funding 'adventurous businesses ' how far will that spread ??
 
Belli said:
The dumbest of questions springs to my mind which is Why? What benefit did they achieve in having funds with SVB rather say ANZ? A warm, fuzzy feeling of supporting a tech bank maybe.
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companies hoping to expand into the US or at least tap investment funds there would benefit from a relationship with a US bank , don't forget SVB offered businesses an extensive range of services

i wouldn't call the question dumb , some companies still see the US as the great white hope of expansion ( once they have a foothold in the US the world is their oyster )

( i had a film actor buddy who always dreamed of 'cracking the US markets ' , he tried and is back home now , i think he should have tried the UK but he didn't )
 
frugal.rock said:
Are you going to share your findings there Hitchcock ?
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Able to pay their US employees for one.

Major financial institutions generally wouldn't lend to start ups is another. My thinking , and really this should be in another thread, is possibly SVB took on too much because of this.

Oddly the CEO and two of the Directors (former Republication staffers) supported the watering down of the Dodds-Frank Act so didn't have to undertake annual stress testing like the major banks do.

A recent article from Forbes on the history of the Dodds-Frank Act.

www.forbes.com

How The Dodd-Frank Act Protects Your Money

In the years that followed passage of the Dodd-Frank Act, the U.S. fully recovered from the economic crisis that inspired its creation and enjoyed the longest bull market in history. The financial crisis of 2007-2008 was one of the worst economic disasters in modern U.S. history, and it was in la
www.forbes.com www.forbes.com
 
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