![]() Yes, companies like Compass and MindMed and Cybin all have ongoing Phase II clinical trials. Given the fever that surrounds highly anticipated IPOs these days, it is very likely that many would-be investors in atai will experience sticker shock on IPO day, and not be willing to buy into atai at such an inflated market cap. Atai is already a (private) behemoth in this industry. ![]() That would broaden the concentration from five to six stocks.īut it doesn’t really alter the concentration equation. It’s easily the most-anticipated psychedelics IPO, as atai is immediately expected to become the new industry leader among public companies. A trading date on the NASDAQ could be announced at any time. Will atai’s IPO lead to greater market cap equality?Ītai Life Sciences has now filed for its IPO financing. It is spiraling out of control at an exponential rate.ĪTAI IPO Strategy: Load Up On OTHER Stocks First The Mental Health Crisis is not just worsening. Wide open treatment markets due to the current abysmal standard of careīut this opportunity keeps getting bigger and bigger and bigger.Game-changing results in clinical trials of psychedelic drugs.1+ billion potential consumers of psychedelic drugs.It was clear when investors first began gravitating to psychedelic stocks that there was a big investment opportunity on the table here. And this does not appear to make sense – given the impressive dynamics of the psychedelic drug industry.Ī huge opportunity, increasing exponentially in size The net result is that the market caps of five companies now totally dominate this sector. Retail investor capital among the smaller players has become somewhat diluted, as those dollars are spread across a lot more companies. Part of this disparity can be explained by the influx in new public companies. But their market caps are 20X to 30X greater – with ratios even more skewed versus a couple of these other companies. The largest players in the sector, notably Compass and MindMed, have raised roughly 10 - 15 times as much capital as many of the intermediate companies in this space. ![]() But does it make any sense in a rapidly emerging sector like the psychedelic drug industry, powered by massive capital infusions?Īnd these capital flows have been filtering down to even the smaller players in the industry. This concentration parallels behavior in the broader markets. This comes with most stocks well off previous highs and overall conditions in the sector not as hot as they were last fall. However, market cap concentration among psychedelic stocks has continued to increase and is actually higher today. In any significant market rally, an investor’s portfolio tends to become more concentrated as the winners outpace the also-rans. MindMed Inc (US:MNMD / CAN:MMED) and Numinus Wellness (CAN:NUMI / US:LKYSF), in particular, began to outpace other stocks by a wide margin.īy early November, concentration in the top-5 stocks was near its 2020 peak.Īgain, this is somewhat understandable. Very little concentration outside of CMPS.Ĭoncentration started during the big 2020 rally, which began when Compass commenced trading on September 18th. The remainder of public companies were relatively evenly distributed in size: from microcap startups to a few companies in the $100 - $200 million range. Immediately after the Compass Pathways (US:CMPS) IPO, there was one big fish in the sector: Compass Pathways itself. What about the increasing concentration of ownership in psychedelic stocks? Psychedelic stock ownership becomes much more concentrated With multinational corporations totally dominating most of these sectors, increasing concentration of investor capital is at least somewhat understandable. These companies are generally in mature sectors. This may make ‘sense’ (to the gamblers) with respect to the mature large caps that largely populate the S&P500 and even the NASDAQ. The fat get fatter while most other public companies drift. Manic gamblers, masquerading as investors, chase momentum. markets is rather easily explained.įueled by the oceans of additional central bank funny-money, markets have largely degenerated into crazed casinos. ![]() The general concentration of stock ownership in (specifically) U.S. markets, it’s also at unprecedented extremes. It’s simply referred to as “concentration” of stock ownership. Except it’s not called market cap inequality. However, market cap inequality among public companies is another huge story. The reckless and unprecedented injections of capital into our markets and economies by central banks has (mysteriously) been concentrated as increasing wealth in the pockets of – relatively speaking – a handful of multi-billionaires. Wealth inequality has become a huge story in our societies. There are strong reasons to believe that such concentration is not sustainable.Five public companies totally dominate the psychedelic drug space, by market cap.Catch up (cover) by Rogatnev is licensed under Adobe Stock ![]()
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