Grand Old Duke of York Syndrome

By Frank Buhagiar on Monday 21 November 2022

Grand Old Duke of York Syndrome
Image source: Grand Old Duke of York Syndrome
CommentaryFoodTech Investment

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

So, this is how it must have felt like for the Grand Old Duke of York’s 10,000 men as they were marched up the hill only to be promptly marched back down again.  For it was a case of another week, another about-turn by FFF’s listed FoodTech space. This time it was the turn of the fallers to outnumber the risers by a ratio of 2 to 1. In all, there were 33 fallers, 15 risers and one non-mover by close of play on 18 November 2022.  Almost an exact reverse of the previous week.   

Top riser with a 36% gain was Calyxt (CLXT).  Two bits of news out from the plant-based synthetic bio company.  First up, an announcement confirming Nasdaq had granted CLXT’s request for “a 180-day extension to regain compliance with Nasdaq's minimum bid price requirement…The Company now has until May 15, 2023 to meet the requirement. If at any time prior to May 15, 2023, the bid price of the Company's ordinary shares closes at $1.00 per share or more for a minimum of 10 consecutive business days, the Company will regain compliance with the Bid Price Rule, and the matter will be closed.” Shares ended the week at US$0.188 - reverse stock split on the cards perhaps?

Or maybe not if operational milestones continue to be hit like the one announced in the company’s second press release of the week – ‘Calyxt Achieves Phase 1 Milestone in Collaboration Agreement to Develop Alternative to Palm Oil’. The announcement goes on to say CLXT “…has successfully completed the first phase in its research collaboration agreement with a leading global food ingredient manufacturer based in Asia to develop an improved soybean capable of producing an oil as a commercial alternative to palm oil.”  And there’s more: “…this first milestone results in a cash milestone payment to Calyxt”.  Now, the shares didn’t do much on the news, but a few more like that and the company might just have investors eating out of the palm (oil) of its hand…

Next up with a 33% gain was Dada Nexus (DADA).  Shares in ‘China’s leading local on-demand delivery and retail platform’ were in demand following a Q3 earnings report that showed a 41% year on year jump in net revenues to 2.38 billion yuan ($333 million), a near halving in the net loss to just over 270 million yuan ($38 million) compared to Q3 2021’s 450 million yuan net loss ($63 million) and a 32% increase in the no. of active consumers to 75.4 million over the course of year to 30 September 2022.  As for Q4, management expects total revenues to increase by between 30-35%. An earnings report that had it all.

Not such a good week for other delivery platforms in the space, however: DoorDash (DASH) -7.5%; Delivery Hero (DHER) -1.7%; Ocado (OCDO) -16.5%; Just Eat Takeaway (TKWY) -8%; Deliveroo (ROO) -6.6%; and Boxed (BOXD) -14%. But hey after the run they’ve had in recent weeks, perhaps a pause was always on the cards.  Question is: can the sector regroup and push on again?

Finally, disappointing Q3 earnings update from Oatly.  CEO Toni Petersson’s comment says it all: “Third quarter financial results were below our expectations, largely driven by COVID-19 restrictions in Asia, production challenges in the Americas, and continued foreign exchange headwinds.” Last week’s Food on the Move, ‘CAMPEONES! CAMPEONES! OATLY, OATLY, OATLY!’ covered a 20% share price gain for the oat drink co.  Seven days on and the shares had given back all last week’s gains to finish off 20.5%.  A classic case of Grand Old Duke of York Syndrome…