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Investors in AIM-listed Vela Technologies (LON:VELA) have been rewarded with some spectacular share price gains in recent days. The gains come as the suspension of Vela Technologies stock was lifted on 26 August, following a capital restructure. But having said that, there is little in the way of fundamental news to justify the rise, or indeed further appreciation in the stock.

Vela went to share and bond owners for approval to dispose of some assets, and to reorganise its capital. The company also wanted to convert £550,000 of its outstanding bonds into shares. Following the admission of these shares, Vela stock had 7.17bn shares issued.


Vela Technologies invests in technology companies that have disruptive potential. It has said that it is expanding its remit to include companies on a Recognised Stock Exchange. It looks for technology opportunities across a diverse range of industries, including aviation and the oil and gas sector.

A range of instruments have now been admitted to trading, including bond conversion shares, placing shares, fee shares, broker shares and new ordinary shares.

Surge in demand for Vela Technologies stock

Since Vela stock was re-admitted there has been a surge in demand. Shares rose from 0.05p on 3 September to open at around 0.14p today. Historically minded investors will recall, however, that Vela was trading at 1.19p at the end of 2018. At the moment there seems to be no substantial news to prompt the stock price move for Vela – much of the current buying volume in the stock seems prompted by momentum than anything else.

Vela’s aims to invest in companies that have both pre-commercialisation and commercialised technology, especially early stage investments that can show a strong management team, innovative product proposals and cost saving capabilities.

Vela has invested in the past in a portfolio of interesting technology opportunities. By way of example, Interbit is a next generation blockchain platform which trades on the Toronto Stock Exchange, while AirPortr claims to be “the world’s first fully integrated home back check-in service,” which is working with airlines like British Airways and Cathay Pacific. But it seems to have been foundering more recently.

Hit and miss technology ventures

However, the latest statement from Vela indicates the company holds stakes in a small number of technology ventures, namely Argo Blockchain, Vibe Group Holdings, Stream TV Networks and Advanced Laser Imaging. It also holds 185,000 shares in Nektan, which have been written down to nil, and has noted that its stake in Advanced Laser Imaging is largely worthless.

Argo Blockchain is a London-listed blockchain mining enterprise (LON:ARB) in which Vela holds 3m shares. It recently reported higher revenues and margins on the back of soaring Bitcoin prices. Its shares did well between 22 July and the middle of August, but have since sunk substantially. Vibe Group is an IT staffing specialist, while Stream TV Networks is a niche manufacturer of 3D display glasses. None of these strike us as particularly ‘shoot the lights out’ technology ventures, justifying the surge in the share price.

The Armchair Trader reached out to Vibe for comment on its portfolio of investments, but at the time of writing none was forthcoming, although we will update the story if contact is made.

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Please note this article does not constitute investment advice. Investors are encouraged to do their own research beforehand or consult a professional advisor.

Stuart Fieldhouse

Stuart Fieldhouse

Stuart Fieldhouse has spent 25 years in journalism and marketing, including as a wealth management editor for the Financial Times group, covering capital markets and international private banking, and as an investment banking correspondent for Euromoney in Hong Kong. He was the founder editor of The Hedge Fund Journal.

Stuart has worked at CMC Markets, supporting the re-launch of its global financial spread betting and CFD trading platforms. He is also the author of two books on trading, published by Financial Times Pearson. Based in The Armchair Trader’s London office, Stuart continues to advise fund managers, private banks, family offices and other financial institutions.

Comments

This Post Has 2 Comments
  1. Boring. Nothing new. Vela is tiny co with tiny market and there is huge potential here now with investors backing. What was the point of this silly article? To buy shares or have shorted?

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