Closing Bell: Xero losses undercut tech sector as ASX dips
Xero sheds 4.7% on $3.9b acquisition of Melio Payments
Info tech sector slumps 2%
ASX edges lower on Xero acquisition
The ASX 200 has fallen 8.4 points or 0.1% in trade today, after major information technology stock Xero (ASX:XRO) fell 4.7%.
The damage came after XRO made a $3.9 billion offer for US-based invoicing and accounting platform Melio Payments in a bid to enter the North American market.
The big draw points for the acquisition are integrated payments, expanded revenue streams and accelerated US growth, allowing Xero to expand into payment flows as well as accounting services.
Analysts reckon the price is pretty steep at 13.4-times Melio's annual revenue of US$187 million, especially since the company printed a cash flow loss of $US154 million in the previous quarter.
That said, they also think there are some synergies at play here, and a real opportunity for Xero to break into the American market.
In the meantime, it's cut the legs out from under the Aussie market as the info tech sector slides 2%.
The only solid gains today were in health care, with several biotech stocks making moves.
Clarity Pharmaceuticals (ASX:CU6) jumped 14%, Botanix Pharmaceuticals (ASX:BOT) 8.6%, and Cogstate (ASX:CGS) and Orthocell (ASX:OCC) added 8.2% each.
As for our indices, the ASX All Tech was predictably down 0.96%, with the All Ord Gold not far behind, shedding 0.84%.
The Small Ords made an effort, adding 0.46% but the ASX 200 Resources and ASX Banks indices were the only others in the green, adding just 0.08% and 0.05% respectively.
ACCC slams Australian Gas Network's renewable gas claims
With oil prices stabilising at around US$67.88 a barrel of Brent today, the energy sector is almost dead flat.
A Federal Court action from the ACCC against gas distributor Australian Gas Networks certainly isn't helping matters.
The ACCC alleges AGN made misleading claims in its 'Love Gas' TV and digital advertising campaign, where the company claimed it would be distributing renewable gas to households within a generation.
'It is not currently possible to distribute renewable gas at scale and at an economically viable price, and throughout 2022 and 2023 it was highly uncertain whether, and if so when, this would be possible,' ACCC chair Gina Cass-Gottlieb said.
'We allege that even though Australian Gas Networks knew the future of renewable gas was uncertain, it made an unqualified representation to consumers that it would distribute renewable gas to households within a generation.'
The ACCC is seeking declarations, penalties, costs and other orders.
Parent company Australian Gas Infrastructure Group vowed to defend its subsidiary's claims.
'We always strive to provide clear and accurate communications about the role and benefits of natural gas today and renewable gas into the future,' AGIG's statement read.
'For this reason, we are disappointed with the ACCC's decision to take proceedings and will be defending these claims. AGIG will not be making any further comment at this stage."
ASX SMALL CAP LEADERS
Today's best performing small cap stocks:
Security Name Last % Change Volume Market Cap
VML Vital Metals Limited 0.003 200% 10668158 $5,895,067
PFM Platformo Ltd 0.085 81% 5000 $4,460,690
LKY Locksleyresources 0.088 52% 22958926 $10,633,333
ALR Altairminerals 0.003 50% 264438 $8,593,488
EEL Enrg Elements Ltd 0.0015 50% 354475 $3,253,779
RCM Rapid Critical 0.003 50% 22383999 $2,831,556
TEG Triangle Energy Ltd 0.003 50% 2942226 $4,178,468
OPL Opyl Limited 0.028 47% 14061855 $4,464,398
SPQ Superior Resources 0.005 43% 5075539 $8,298,440
PV1 Provaris Energy Ltd 0.017 42% 4201927 $8,376,015
LOC Locatetechnologies 0.245 40% 6432545 $40,307,564
SLZ Sultan Resources Ltd 0.007 40% 5173612 $1,157,350
AMS Atomos 0.004 33% 4718113 $3,645,055
BP8 Bph Global Ltd 0.002 33% 105539 $1,576,477
CZN Corazon Ltd 0.002 33% 667996 $1,776,858
VN8 Vonex Limited. 0.024 33% 360256 $13,546,863
WWG Wisewaygroupltd 0.185 32% 140498 $23,429,447
EVR Ev Resources Ltd 0.009 29% 6333485 $13,900,857
DY6 Dy6Metalsltd 0.11 28% 362157 $5,708,107
OLH Oldfields Holdings 0.025 25% 60000 $4,261,183
JAV Javelin Minerals Ltd 0.0025 25% 4377333 $12,252,298
KPO Kalina Power Limited 0.005 25% 2945589 $11,731,983
SHP South Harz Potash 0.0025 25% 3977937 $2,205,457
VRX VRX Silica Ltd 0.086 23% 4347080 $52,311,230
BTE Botalaenergyltd 0.06 22% 58960 $12,797,475
Making news…
Vital Metals (ASX:VML) is about to initiate a share consolidation on a 50 to 1 basis after shareholders voted in favour at today's general meeting.
That'll reduce the company's issued shares from 5 billion to just under 118 million, in turn bumping its share price up 50-fold. As the company hit 2 cents a share in trade today, that will translate to a $1.00 price tag for VML shares post consolidation.
Rapid Critical Metals (ASX:RCM) has its eyes set on the Conrad and Webbs silver projects in New South Wales after securing firm commitments to raise $10.5m in a share placement at $0.024 a share.
There's been no modern exploration on either project for a decade, offering an opportunity to expand and upgrade existing resource estimates. RCM will begin with the Webbs project, employing targeted geophysics, drilling and metallurgical studies.
Opyl (ASX:OPL) has snapped up two Bitcoin for about $330k as part of a treasury diversification process led by executive Tony G.
Tony is chair of SOL Strategies, a CSE-listed Solana-based crypto company with a market cap of CAD$375M.
OPL reckons the asset class is gaining momentum and offers high levels of liquidity, as well as opening up opportunities to plug into blockchain-based AI infrastructure.
Locksley Resources (ASX:LKY) has officially listed to the OTCBQ under the ticker LKYRF, gaining broader access to North American investors and a deeper capital pool for its flagship Mojave rare earths project
VRX Silica (ASX:VRX) has received the green light from the WA Minister for Environment for its environmental protection proposal at the Arrowsmith North silica sand project.
Originally knocked back by an appeal from the Conservation Council of WA, the Minister has accepted recommendations to amend conditions addressing vegetation dieback, which VRX is happy to address.
ASX SMALL CAP LAGGARDS
Today's worst performing small cap stocks:
Security Name Last % Change Volume Market Cap
AOA Ausmon Resorces 0.001 -50% 515819 $2,622,427
C7A Clara Resources 0.0025 -38% 5508687 $2,353,084
HCD Hydrocarbon Dynamics 0.002 -33% 33333 $3,234,328
PIL Peppermint Inv Ltd 0.002 -33% 137297 $6,903,269
QXR Qx Resources Limited 0.002 -33% 1148011 $3,930,987
WEL Winchester Energy 0.001 -33% 4062051 $2,044,528
TML Timah Resources Ltd 0.024 -31% 10000 $3,106,592
ASP Aspermont Limited 0.005 -29% 1191980 $17,312,314
LU7 Lithium Universe Ltd 0.005 -29% 13733062 $5,501,857
FHS Freehill Mining Ltd. 0.003 -25% 4970168 $13,655,414
HLX Helix Resources 0.0015 -25% 350000 $6,728,387
MGU Magnum Mining & Exp 0.003 -25% 2731100 $4,486,603
MTB Mount Burgess Mining 0.003 -25% 4843886 $1,406,811
RDS Redstone Resources 0.003 -25% 1100000 $4,137,069
BLU Blue Energy Limited 0.005 -23% 2147376 $12,031,328
SPX Spenda Limited 0.0055 -21% 1872752 $32,306,508
ERL Empire Resources 0.004 -20% 100000 $7,419,566
PKO Peako Limited 0.002 -20% 233022 $3,719,355
RDN Raiden Resources Ltd 0.004 -20% 12447509 $17,254,457
TFL Tasfoods Ltd 0.004 -20% 2242057 $2,185,478
TGH Terragen 0.018 -18% 1770327 $11,110,378
NSB Neuroscientific 0.074 -18% 729709 $13,014,438
ALY Alchemy Resource Ltd 0.005 -17% 45000 $7,068,458
BLZ Blaze Minerals Ltd 0.0025 -17% 416000 $4,842,000
DAF Discovery Alaska Ltd 0.01 -17% 48333 $2,810,816
IN CASE YOU MISSED IT
Neurizon Therapeutics (ASX:NUZ) has developed a liquid version of its ALS treatment drug with the goal of improving the patient experience as the disease progresses.
X2M Connect (ASX:X2M) has scored $1m of water monitoring contracts in South Korea, bringing total contract value in the country to $5.5m.
Brightstar Resources (ASX:BTR) reckons it can grow the maiden ore reserve for its Second Fortune and Fish underground mines with more surface and underground drilling, which is due to start imminently.
Everest Metals Corporation (ASX:EMC) have confirmed an extensive regional gold trend that highlights the considerable scale of the Revere gold project.
Hillgrove Resources (ASX:HGO) has revealed more copper beyond the confines of its Kanmantoo mine resource base, thanks to deep diamond drilling.
HyTerra (ASX:HYT) has expanded drilling plans at the Nemaha project, increasing the number of white hydrogen wells from two to three.
TRADING HALTS
Astron Corporation (ASX:ATR) – work plan application update
Percheron Therapeutics (ASX:PER) – pending licensing deal
PointsBet Holdings (ASX:PBH) – outcome of scheme meeting
hummgroup (ASX:HUM) – potential acquisition offer
Xero Limited (ASX:XRO) – corporate transaction and equity raise
At Stockhead, we tell it like it is. While Locksley Resources is a Stockhead advertiser, it did not sponsor this article.
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