The much-hyped Vault Ventures PLC (#VULT) AMA finally took place today, albeit a little later than planned, initially scheduled for last week. Investors had been waiting patiently to hear from the board of directors and to learn the vision for the stock from the men who intend to deliver it. This was closely followed by two RNSs, one simply giving the results of the General Meeting, the other was the one investors have been waiting for, providing the latest holdings of Bitcoin, Ethereum, and Sol held in the company’s treasury.
This is one of my newer investments, and it sits firmly in the higher-risk category of my portfolio. Vault Ventures PLC is still a company in its infancy and should only occupy a small portion of anyone’s portfolio if they consider investing in the shares. This wasn’t an investment I initially put a lot of thought into; it was simply a case of a business merging two buzzwords, and I decided to take a punt.
The two hot areas of the market at the moment are cryptocurrency-related stocks and the darling of the past year or so, Artificial Intelligence. Given the stock’s small market capitalisation, with sufficient volume, a profit could be made by trading it. So I entered, and amazingly, a couple of weeks later, I am still here and feeling slightly more confident in my decision.
Today’s AMA would have put many investors at ease. The board provided a decent representation of their vision for both the AI segment of the business and the cryptocurrency treasury side, enough to convince me to stay and see where they can take it. I am still far from convinced that this is a sound investment; however, is it possible to invest in a sub-£100 m market capitalisation (Mcap) business and be seriously sold on the investment case? I think this is where a lot go wrong in the micro-cap sector, they fall in love with a concept and the company selling it, only to find the broader market does not agree, then get disappointed when the company fails to raise enough money, and or the everyday running costs drag the business under, it is an all to familiar sight in the speculative stocks on the London Stock exchange.
So, what was the outcome of the AMA, and why am I now optimistically bullish?
First, I will start with System 7 – the AI wing of the company. The company seems to be in good hands; Nick Baxtor, who is heading up this arm of the company, gave an air of confidence – interestingly, he did an almighty name drop, mentioning having previously worked with non-other than Sam Altman’s brother, for those that missed it – thats the brother of OpenAI CEO (Chat GTP) – putting Nick in the company of the great and good of the AI field.
While crypto fever is upon us, and the company is essentially getting valued by its crypto treasury, you could be forgiven for forgetting what this company is really about. It’s this wing of the company that genuinely excites me.
The company aims to launch products to the market quickly, and with AI arguably the fastest-growing sector of the moment, this could turn out to be a very profitable arm of the business. The intention is to bring three new products to market per year, which would be quite a feat and means steady news flow should continue even after the crypto bull market is over. Notably, Nick mentioned converging Artificial Intelligence and blockchain, using the blockchain to validate AI – an exciting concept and one that will add further assurances to those looking to use the company’s products.
The treasury strategy, naturally got extensive coverage, given that it’s likely the reason most investors discovered the stock in the first place.
Both Ethereum and Solana are the cryptocurrencies that the board are bullish on, and for good reason, too. Rather than follow the herd and dive headfirst into BTC, the company has taken a slightly more unique approach. An approach that, in the long term, will prove far more profitable than just holding BTC on the balance sheet. While it is assumed BTC will appreciate in value over time, the only way to profit from this is to sell, which circumvents the purpose of holding the asset in the first place; it makes for a static investment. ETH and SOL are different, however, due to the ability to stake the tokens. If you need any confirmation bias on why staking might be a good idea – take a look at KR1’s monthly updates and the vast income that can be derived from staking crypto tokens.
As one would expect, the question of listing on the OTC market was raised; this has frequently led to outsized returns for the treasury companies that make the leap, given Americans’ keen interest in cryptocurrency. It certainly wasn’t ruled out, and should an RNS land, titled consolidation of shares, you can expect an OTC listing to follow closely behind.
The AMA was concluded with the board promising further AMAs and transparency with investors, which was a good way to end the discussion. All in all, this gives me confidence going forward. Can they execute the plan? That’s a different question altogether.
Finally, as outlined above, we were treated to an RNS outlining the current treasury holdings; they now stand as follows:
BTC – 3.79752
ETH – 654.1553
SOL – 1243.52
With a total NAV of £2.03m (treasury tokens), this figure is before any value has been attributed to System 7.
Disclaimer: Nothing in this article is intended as investment advice, and readers should always do their own research. The cryptocurrency sector is highly volatile and can move rapidly in both directions. I may be invested in some of the stocks I mention in these articles, so please note that my comments may be biased. Everything is my opinion, so please fact-check.
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