Tee G

[Tee G @AlwaysbeTee]

@GuyChase9 What is the deal with Macquarie. Never seen them before and then all of the sudden selling almost 40k over the last 2 days. Absolutely no buying

[uncle baby billy @NotoriousBaggie]

@JoshCrumb @_riskFULL @Bprivateers69 @anaparastasum @KathuriaManan @James_Duade Take the Labrador iron assets, clip a 1% royalty, put the royalty into a new company: "RoyaltyCo". Abaxx keeps 80% and spins out the remaining 20% to shareholders. Shorts have to cover as they can't produce the "RoyaltyCo equity". Costs maybe $50k/yr in ongoing filing costs.

[Tee G @AlwaysbeTee]

@NotoriousBaggie @JoshCrumb @_riskFULL @Bprivateers69 @anaparastasum @KathuriaManan @James_Duade I like this idea. If shorts are the issue this would solve alot.

[uncle baby billy @NotoriousBaggie]

@JoshCrumb @_riskFULL @Bprivateers69 @anaparastasum @KathuriaManan @James_Duade The distributions can be phased, too.

Very interested what the big guy @JoshCrumb thinks.

[Tee G @AlwaysbeTee]

@UpslopeCapital @KEDM_COM Looks like you called it correctly unfortunately

[Tee G @AlwaysbeTee]

@JoshCrumb @Veekay0606 Seems grossly misplaced by the market to sell off a physically settled commodity exchange….

[Tee G @AlwaysbeTee]

@PKsNYC @James_Duade Well put. A distraction for the bigs while the little physical settler continues on.

[Tee G @AlwaysbeTee]

@Veekay0606 @JoshCrumb Interesting to close sub $54… something not adding up

[Josh Crumb 🆔++ @JoshCrumb]

All good. Headline is “Canadian bought deal”, reality under the hood is that it is some incredible long only funds and ATB + Cantor hustled for 9 months for a great deal and got paid for the inbound. Clean deal and great book.

[better to raise money with clean market window and good momentum when nobody expecting it, than try to take it all off the table with potentially no window and everyone expecting it..ie Abaxx c2024]

[Josh Crumb 🆔++ @JoshCrumb]

@JayIsAllDay Correct. They were very aware of the situation going in and how to handle it internally with their desks. As I mentioned, book was full before it went live, sales desk wasn’t even part of the process so any PR inbounds from undesirables not getting a fill

[655321 @PKsNYC]

Net/Net: another opportunity lost to properly market the Abaxx tech story, generate a 5x-8x demand to get a premium pricing at the expense a slightly higher dilution. The deal rewards committed institutions who've bought in the market, without proper price discovery. One day Abaxx will escape the Canadian markets trap (heavily weighted towards financials, energy, mining…), just not today.

The News: Earlier today, after the close, @abaxx_tech announced a CAD$50mn bought deal to sell 922k shares @ CAD$54.25 (1.06mn shares and CAD$57.5mn gross proceeds after 15% overallotment). The pricing was a 12.5% discount to today’s closing price and a 4.4% discount to the avg price over the past calendar month.

Who got the shares? The deal was apparently placed among institutional investors who’ve been actively buying shares in the market: “Earn your long-term hold shares or buy in the market” according to Abaxx’ CEO Mr. Crumb, apparently rewarding LT Hodlers of the shares, ensuring no flowback vs the discount to the last traded price. Shortly after the announcement, the size of the oversubscription (from inbound share requests) was about 3x (and expected to be higher at the close of the deal), despite that this was not a marketed deal. This reflects unmet demand from potential new institutional shareholders that Mr Crumb expects will turn to the open market to build their positions.

Uses of proceeds: The transaction funds over +1 year of Opex, extending Abaxx’ cash runway beyond 2027. The uses of proceeds will largely fund the @abaxx_exchange’s operating cashflow and the Opex required to fuel the go to market of Abaxx’ tech products (MarketOS, Agents++, etc).

Why now? Part of the rationale for the timing of the deal was the risk of deteriorating market conditions later this year. Rising LT US$ interest rates and the incoming energy crunch from the conflict in the middle east, let alone a resumption of all-out hostilities, raised the specter of the company running low on cash amidst an economic shock that @CommodMkt labels larger than Covid-19. This was probably the overriding concern that drove this deal. Without a successful launch of MarketOS (T+0 collateral) with the onboarding of the energy trading complex, it's probably too much to ask for a better valuation.

A Missed Opportunity: A properly marketed deal would have generated 5x-8x... and a premium not a discount, IMHO. Then again I’ve never run a company, but I've seen properly marketed deals generate the type of demand and liquidity (yes, selling to HFs and short-sellers) that incites lowly allocated accounts to buy in the aftermarket. This is the unmet demand that can’t be bothered to buy 5-10k/day for who knows how long to build a position, in full knowledge that their investment committees would turn down the investment opportunity. Low liquidity begets low liquidity, and LT Hodlers, while welcome, are only going to add to the closely held nature of this company (shout out to the #29ers). The effective free float remains low, which could be explosive, as we expect top line growth to fuel this story.

The company is rewarding the institutions that bought with the short-sellers liquidity, minimizing dilution at the price of taking a big discount, probably close to the VWAP of these funds’ purchases. Quid pro quo here? You bet, nothing wrong there.

What about the index buying? The last time around, the increase in borrow supply from new passive holders fueled the increase in net shorts, which remain low in relative terms (despite being large vs ADTV), allowing them to deploy their price suppression strategies and pray for a way out. Expect more of the same in the next inclusion rounds from the Karens short under the “100x trailing revenue” rationale...

#29ers $ABXX $ABXXF

[Tee G @AlwaysbeTee]

@Greenacres1000 @NotoriousBaggie And I should have waited for more info to come out…. PIE ON MY FACE! Always more to this story with this company!

[Tee G @AlwaysbeTee]

@Greenacres1000 @NotoriousBaggie Just felt a tad off brand with all the signalling of shorts, strategics and destain for the Canadian markets.

[Tee G @AlwaysbeTee]

@_riskFULL This is why I love this app! Always on point sir

[Josh Crumb 🆔++ @JoshCrumb]

Both are partially right.

1) OI is low because you have to have physical market makers (who can make/take delivery) and financial market markers (spreads and volume). We have this in precious but it’s still just a handful. It drops off significantly end of month from both our expiry window, as well as Comex expiry windows where a lot of traders are arbing and trading against. In VCMCarbon we also have physical makers/takers (unlike a major competitor who literally wrote a contract spec where there was no available “physical” to their spec, nobody to make/take registry transfer). LNG and Lithium is close. When, not if on building OI and deliveries.

2) But volume does matter. Bank FCMs don’t even start onboarding until they can seen the liquidity and tight spreads needed for institutional flows. Thats about 20k per day from what we learned at Boca (which is when many flipped the green light end of March to submit clearing applications and/or find carry broker connections). And arb revenue against other markets, even if it slows end of month, is still rev.

3) Finacial futures startups (MiaEx ext) aren’t relevant here from a V/OI perspective due to #1. And we’re the first full stack physical clearinghouse perhaps ever (new contracts, new clearinghouse + FCMs/ISVs connect, new tech, all from scratch, takes time). And physical commodities liquidity is winner take all (see #1 again), financial futures and equities are replicable and all compete (even though best liquidity pools still take most). We aren’t listing copies of WTI to take market share, we’re ramping up our own products with no competition (other than carbon).

4) So the billion dollar question where these threads all started….What should be forward priced into the stock based on the risk/reward of above, runway/dilution, and where V/OI is at?

Should you go long or short on early volume/low OI versus market cap?

If you think we don’t have the clearing members and physical market makers onboarding and we don’t know what we’re doing, and we won’t through the low budget runway we’re operating on ($_30mm annual “burn” to wait on this “option” is literally nothing on our market cap & the backers we have, ~2% dilution per year). Remember, we already sunk all captial for a 1mm ADV exchange, dilution behind us, pre-built. And now look at how I’ve managed dilution for 6years WITHOUT revenue and ramp up, on-boarding momentum; you think now is where I’m going to dilute uncontrollably and lower the probability of a 1mm ADV NAV that I still own +10% of? If we hit it anytime in the next 7 years you’re going to make [many] multiples on your shares here (Lol, or the moron-take that I’m just going to pump & dump my future 4/5-figure stock into an index…Claire, ms. 4%. zero-DD).

(This is all the conservative take btw, competing on the incumbents web1 playing field, we’ll still go up multiples from here…but they can’t even play on the MarketOS Web3.5 playing field we are building, in that we are 1 of 1 and will be coming to take existing markets and liquidity as well).

Alright cool, so now let’s get back to addressing the morons shorting an illiquid call option now, with a month plus to cover liquidity, on shares that can’t be pried out of the cold dead hands of me, [major family offices and institutions] and people that have held for 4-5yrs because they understand the simple math we’ve set up. I guess some people don’t know how to do forward probabilities and share counts, can’t see the flood of institutions now wanting limited stock—for them they can go ahead and short the coin toss in a heavily skewed coin and cry FRAUD (lol, we literally have NYMEX people that have been building markets for 5 decades, Goldman partners that helped build Brent, ICE, former head of CME metals and energy, former head of product launching clearport, head of DME / Omani crude, co-head Goldman Asia…and and…all in on a pump and dump and not here to build markets hahahaha)

[Tee G @AlwaysbeTee]

@James_Duade @Greenacres1000 Keep doing your thing! Shorts are expected! Know what you own and trust your DD.

[Tee G @AlwaysbeTee]

@MidwestHedgie @ShmuelLon You also have a short that is stuck.

[Tee G @AlwaysbeTee]

@DonDurrett Hopefully they see as much traction as their gold contract right out of the gate!

[Josh Crumb 🆔++ @JoshCrumb]

Wow, I couldn’t disagree more with something that ICE CEO Jeff Sprecher said in this interview today. This is such a massive tailwind for Abaxx that I don’t believe is understood or factored into our market and valuation at all. I’ll go over this more in our quarterly call this week.

..First off, I have nothing but respect for Mr. Sprecher and what he’s built. It’s nice to see an exchange founder with this mainstream airtime. And he’s been nothing but encouraging and nice to me in our few brief interactions.

But our tech approach and vision is very different. When talking about 24/7 markets and the global distribution networks for capital markets over the internet (the shared goal and endpoint for both companies, both in pilot and rollout phase now), this is what Jeff says when talking about ‘blockchain’:

“..we’re not only going to have to change our technology, but we’re going to need to change how our legal contracts work, how things settle, what happens in bankruptcy”.

Jeff perfectly articulated the impossible part out loud, which we’ve been talking about extensively over the past year. Not only does the “blockchain #RWA vision” require worse technology systems to be distributed and sold into all institutions, adding more tech operations and more layers to the existing system (more fragility) to realize this flawed-vision of centralized ‘bearer token finance’—but we’ll also need to rewrite laws (in harmonization!) across the whole global daisy chain of distribution to not have solvency gaps? For what end goal, to maximizes the value of blockchain “bearer tokens” held by crypto funds, to try and backfill the the pre-sold bag of under-utilized “blockspace markets” for an exploding number of pseudo-decentralized (but legally reversible) L1/L2 surveillance-chains with no actual business moat?

I’m very surprised that a fellow engineer, Mr. Sprecher, thinks that replacing both global financial institutions core tech, and all global legal frameworks, is the optimum path here.

At Abaxx, we have a totally different engineered path to the reach the same end state (24/7, global, digital), while needing no replacement infrastructure and no new laws.

Why? How? Our core primitive is decentralized and resolvable [private] digital identity, and real-time #LegalFinality, which is always more important than #LedgerFinality when Law (🪨) beats Ledger (✂️); as securities and asset laws can always overturn ledgers with RWA. And our systems work with existing ledgers (centralized, regulated, private blockchains, public blockchains, any), and existing laws.

Can’t wait for the market to finally see and understand this about what Abaxx Tech has built with 🆔++ (and 🔜 at agentic operating speed with Agents++) in the second half of the year as our systems go live. Wow, so glad I watched this.
#29ers $ABXX #MarketOS