Agoracom Blog

TSX Venture 1,131; Enough Is Enough – We Need A Small Cap Coalition

Posted by AGORACOM at 7:47 AM on Thursday, February 28th, 2013

The TSX Venture hit 1,131 again yesterday.   With the exception of the global financial crisis of 2008-2009, you’d have to go back to 2003 to last find this level …. 2003!

There are enough stories out there giving you all the reasons why we are where we are, so I’m not going to bore your with a rehash other than to say  I myself have been calling for a catharsis to the glut of TSX Venture listed companies since 2008.   If you absolutely need a great article to reference, have a look at this John Kaiser interview.

The bottom line is that enough is enough.  It’s time for real small-cap companies to band together and take control of this situation.


Let’s cut straight to the chase.  No beating around the bush. This is why we need a small-cap coalition right now.

  1. 50% Of Small-Cap Companies Need To Die. They simply don’t deserve to be public.  They’re either recent paper plays (last 5 years) that were strictly intended to provide returns for early private placement holders OR recycled plays that continually reverse their stock and “reinvent” themselves.
  2. They Suck $$ Out Of The Small-Cap System.   Quite simply, any dollar (institutional or retail) going into them is wasted.
  3. They Dilute Investor Attention.  These companies are the most likely to promote via conferences, e-mail blasting, phone banks and every promotional tactic possible.  They make really big claims.  This only serves to confuse investors who can’t differentiate between them and you.
  4. They Won’t Die Fast Enough … And May Take Everybody Down With Them.  Retail investors are bailing out of TSX Venture and Small-Cap TSX stocks.  If you think they aren’t as important as the institutional side, think again.  Retail investors make the market.  They provide the real liquidity.  They provide the speculative activity that institutional investors need to support their capital injections.  No retail, no nothing.  We need to bring retail back.  You need to do it now.
  5. You’re Not IBM or BHP.  You don’t have a 50-year operating history with billions in revenue, global deployment of your products, or owner of the biggest ore bodies on the planet.  You’re a small-cap speculative company hoping to become IBM or one day. That’s OK. Just realize that until you do get there, you’re a retail investor story.  You need retail investors.
  6. You Can’t Go It Alone.  Marketing to a target audience is tough even when you have every resource at your disposal.  Just ask the companies behind The 10 Worst Super Bowl Ads Of All Time.  Given the fact you won’t be advertising during a Super Bowl any time soon, marketing your company as part of a small cap coalition of distinguished small-cap companies is the only way to go.
  7. Create Separation and A Starting Point.  A small-cap coalition whose members meet a pre-determined set of criteria will immensely help members differentiate themselves from the remainder of the pack.  This then provides small-cap investors with a starting point from which to begin their research in confidence.
  8. Scarcity Creates Value and Investment Concentration.  Our proposed small-cap coalition would be limited to 100 companies from all different sectors.  By limiting the number of companies, the coalition becomes an extremely valuable research base for small-cap investors, which will ultimately lead to a funneling of their investment dollars into the concentrated number of coalition companies.
  9. Reach Into Every Corner Of The Planet.  By marketing as an elite, exclusive coalition of small-cap companies, we can access marketing channels that are otherwise simply unreachable on your own.  From prime time TV ad spots on CNBC & Bloomberg, to the Financial Times, to search engine campaigns in Asia, no investor is any longer out of reach.
  10. You Don’t Need To Spend Any Cash  … Any Cash.  Thanks to the financial resources of AGORACOM, participating small-cap companies won’t need to provide $1 of cash to fund the program.  TSX companies can simply issue shares, while  TSX Venture Policy 4.3 (5) allows for TSXV Issuers to pay for advertising and marketing via Shares For Services as well.

I encourage each of you to table this at your next board / management meeting and seriously consider it.  We need to fundamentally change the small-cap landscape before the small-cap landscape changes us.  The means and technology are in place to make it happen on an unprecedented level.  Best of all, it can be accomplished without depleting valuable cash resources.

If you’re an investors, I encourage you to share this post with your portfolio companies and fellow investors.

I look forward to your comments, questions and feedback.


George Tsiolis, LL.B




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