SMX Security Matters (NASDAQ: SMX) is a recent IPO via a SPAC that really just didn't work out so well. From the usual $10 SPAC price we're now down at $1.89 and that's after - yes after - the 40% rise premarket this morning. Just not a good performance - even if there was that soar to $14.60 for that brief moment a couple of months back before it faded back again.
The specific thing that SMX does is produce chemicals which can act as something similar to a barcode - which can then be used to track and trace through a production or logistics run. Seems like an interesting idea. But that's not really what is determining the stock price here.
One thing that riles markets is when people complain about short selling. Yes, of course, that shorting might be an affront to hopes and dreams and all that but is it just part of a stock market. Complaining about it just makes those doing the complaining look as if they're concentrated upon that stock price rather than actually running the company. Even illegal short selling - so called “naked” - is just one of those things that's going to happen out there.
SMX share price from NASDAQ
That's not a stock price chart to make an investment banker smile. Which brings us to the more general, sectoral, point here. Yes, SPACs have their uses. It enables a young company to come to market with much lower costs than the traditional IPO route. But then it's also true that at any one time there only so many companies worthy of coming to market. The business world contains many more failures than successes after all.
So, as and when SPACs become a craze then it's easy enough to posit that the first wave of them could be pretty good. But once that backlog is eaten through then the subsequent offerings could be less than worthy of that public quote and our money.
Not that we're saying this is true of SMX, merely to float the idea that the later offerings might not be quite so good as the earlier.