Honours even

By Frank Buhagiar on Tuesday 24 January 2023

Honours even
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CommentaryFoodTech Investment

Food on the Move: FFF’s weekly roundup of listed FoodTech’s movers & shakers

Question: what can you find inside both a gentleman’s tailor and the latest installment of FFF’s Food on the Move?  Answer: a tie.  That’s because FFF’s review of listed-FoodTech’s risers and fallers for the week ended Friday 20 January ended in…a tie: 24 risers, 24 fallers, and one non-mover. No third week in a row of risers outnumbering fallers then, but at least listed-FoodTech’s unbeaten run in 2023 remains intact…

A couple of loose ends from last week to tie (apologies) up.  In Food on the Move “THE BIG SQUEEZE?”, we wondered if shares in AppHarvest (APPH), which had soared 121% to US$1.87 on no news, would succumb to ‘followingweekitis’, “a not uncommon affliction that typically sees shares hand back gains after a bout of profit-taking”.  We also suggested keeping an eye out to see if the vertical farmer would conjure up a press release to help keep the share price momentum going - “…what price an APPH announcement in the week ahead? One to keep an eye on…”

One week on and, low and behold, APPH shares did give up some of the previous week’s gains – share price closed down 13.5% at US$1.62.  And as for a new press release, hey presto on 18 January the company announced the commencement of “commercial shipments from first harvest at New Richmond, Ky., 60-acre high-tech indoor farm”. Sometimes though, the laws of gravity just can’t be denied.

The APPH press release prediction was based on the actions of Boxed (BOXD) after its share price doubled during the first week of January on the back of the launch of “a process to explore strategic alternatives, including, among other alternatives, a possible sale of the Company”.  The online retailer’s follow-up announcement “…that Spresso, its SaaS modular solution platform, is now available on the Google Cloud Marketplace” appeared to work a treat as the shares tacked on another 63% in the second week of January.  The question was could/would BOXD repeat the trick?

Well, another press release did appear but, alas, it wasn’t enough to stop the shares from shedding 25.75% to close at US$0.473. The latest announcement disclosed that the company had secured “Up to $20 Million of New Financing”. The release went on to say that “approximately $32 million of the Company’s existing convertible notes previously held by the Lender have been exchanged into new loans secured by a second lien security interest in substantially all of the assets of the Company and its subsidiaries, and the Lender has been issued warrants to purchase 14 million shares of the Company’s outstanding common stock at an initial exercise price of $3.00 per share.”  Time will tell if the new loans and warrants have BOXD the share price into a corner, for now at least…

Another carry-over from last week’s Food on the Move was speculation as to whether or not certain FoodTech stocks were benefiting from a Big Squeeze after “stellar gains” were registered by a number of shares that “have been, trading close to the key US$1 level, below which companies fall foul of listing rules.”  Companies such as agriculture/cannabis solutions providers, Agrify (AGFY) and Hydrofarm (HYFM), online delivery platform ASAP (ASAP) and meal kit co. Blue Apron (APRN) posted gains of between 34% and 88% on the back of zero news.    

No “stellar gains” to report this week.  Instead, aside from HYFM’s 1% rise, the remaining three stocks all lost ground – AGFY -10%; ASAP -20%; and APRN -5%.  Despite the weakness, all are still sitting on healthy share price gains, so no need to feel too sorry for them just yet.  As for the mooted Great Short Squeeze, well perhaps it was just a very Short Squeeze.

One piece of M&A to report.  Shares in Calyxt (CLXT) were marked 42.5% higher after the plant-based synthetic bio specialist announced a merger with gene editor Cibus to “create a new industry-leading company that combines the two pioneers in agriculture-based gene editing and establishes one of the world's most sophisticated facilities for trait development and next-generation plant breeding.” CLXT Chief Technology Officer Travis Frey believes: "Consolidating our innovative platforms into one entity brings a myriad of opportunities for step-change innovations in the areas of productivity and low-carbon ingredients. I'm particularly excited for the teams of talented scientists from both companies to combine."  Seems investors are excited too.