It’s fair to say it’s been a poor month for Supply@ME Capital (LSE: SYME) shares. After beginning the month near 0.70p, Supply@ME Capital’s share price has declined to 0.41p. That’s a substantial drop.
Here, I’ll look at why the share price has fallen. I’ll also provide my view on the small-cap FinTech stock now.
Supply@ME Capital: investors are banking profits
It seems to me that the share price fall here is related to profit-taking. After the small-cap stock shot up more than 1,000% in August, it looks like some investors have been taking some money off the table.
News from the company during September has actually looked quite encouraging, in my view. For example, on 4 September, the company advised that it had signed a formal business alliance with Epic SIM for inventory funding and client company origination. Epic is an Italian investment company and FinTech platform for working capital solutions. Investors liked this announcement. The shares popped higher on the news.
Then, on 10 September, Supply@ME Capital released an update on its funding. Here, the company advised that it has received offers from “a number of large, global institutional investors” to provide funding, in the form of securitisation notes, in order to monetise more than €300m of inventory. It also said it had seen strong demand from investment funds requesting exclusivity for securitisation notes issuance.
More recently, on 28 September, the group provided an update on business operations. Here, the company advised that demand for its service has continued to grow since its June update. By the 30 September year end, there will be 142 client companies originated in Italy, up from 97 announced in the interim report.
Looking at these developments, it seems that the company has plenty of momentum right now. It’s moving forward at a fast pace.
Bullish insider activity
It’s worth mentioning that there has been some bullish insider transaction activity at Supply@ME Capital recently. Regulatory filings show that on 23 September, CEO Alessandro Zamboni purchased 630m call options on Supply@ME Capital stock.
Investors buy call options when they expect a stock to rise. So, this purchase of call options – which cost the insider £1.1m – is a positive development. Zamboni clearly thinks Supply@ME Capital’s share price is set to climb higher.
All in all, it seems the growth story here remains intact.
Would I buy Supply@ME Capital shares?
In terms of my view on Supply@ME Capital, I think the stock continues to look interesting. There appears to be strong demand for the company’s service.
That said, it remains a bit too speculative for my liking. With the company still in its early stages, and profits most likely quite far off, share price volatility is likely to remain high.
There are other UK small-cap growth stocks I’d buy before Supply@ME Capital.