SMX Security Matters (NASDAQ: SMX) stock is up 70% or so on the day. SMX stock is also down near 99% since the despac and IPO which is a less pleasant experience for shareholders.But obviously what matters with a share price is what happens next, not what has happened.
We’ve looked before at SMX Security Matters: “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.”
Note that pricing is before the reverse stock split at SMX: “SMX (Security Matters) (NASDAQ: SMX) stock should jump 2.200% at the open. SMX stock will not, sadly, be enhancing the value of the corporation by doing so, this is a purely nominal price move. Something that is, of course, a pity, given the 99% value destruction since the flotation. In fact, 99% value destruction since February. Which is, I think we can all agree, pretty good as an example of losing money for stockholders. The SPAC merger was, after all, only at the end of Jan this year. Maybe there’s a reason some prefer to look at stocks that have gone through the full IPO process? Rather than the short cut of merging into a shell?“
SMX Security Matters stock price from Google Finance
The basic idea seems sensible enough. Being able to track and trade materials through a production and distribution chain - with a chemical barcode equivalent. Well, yes, we can think of people who might be interested in that. It’s the actual performance that doesn’t quite pan out, not the base idea.
We’re also not sure that this transaction, the one leading to hte current bounce, is all that value additive: “SMX (Security Matters) (NASDAQ:SMX) jumped 96% on Tuesday after announcing the acquisition of an additional 7.5% stake in True Gold Consortium, thereby boosting its stake in the gold traceability tech solution company to 51.9%.
As consideration, SMX waived outstanding payables amounting to A$475,000 (about $307,000) from TrueGold as of June 30, and also licensed additional intellectual property to TrueGold.” Now, maybe True Gold is very valuable. Maybe it isn’t. But what it appears to be is near bust. For SMX has bought that stake just for the value of outstanding invoices. Which isn’t an indication that True Gold has some large market value now, is it?
Our view on this is that we're going to stay away. We really don’t see that this is value additive.
