Abaxx Technologies (ABXX): Addressing The Stock Drawdown
Fundamentals the best they have ever been, yet the stock is collapsing...
When I first started buying shares in Abaxx Technologies (ABXX) in the fall of 2021… I thought the commodity exchange would launch within a year.
Management initially planned on doing just that.
Abaxx received Approval in Principle (AIP) as a Recognized Market Operator (RMO) in September 2020 and as an Approved Clearing House (ACH) in August 2021.
Investors thought—all that was left now was to cross the Ts and dot the Is.
I remember listening to Robert Friedland’s first appearance on Smarter Markets where he pitched the company… and man, was I hooked.
A disruptor in a maturing industry dominated by the oligopolistic giants CME and ICE, both companies openly admitting they are avoiding setting up complex markets. Instead settling for creating more financially-settled futures contracts and taking bets on the increasingly competitive prediction markets. Among other distractions.
The big boys are asleep at the wheel… and here comes an experienced team of ex-Goldman executives with a history of spinning up new exchanges, along with thousands of contracts.
Creating a unique, technologically advanced commodity exchange and clearinghouse in an area of the world set to dominate growth trends over the coming decades (Singapore/Asia).
Exchanges are among the highest-margin, highest-valued businesses in the financial sector. Nearly all of Abaxx’s peers are worth tens of billions of dollars. The market cap was around $200 million CAD when I started buying.
In my mind, this was about as obvious a positive asymmetrical bet as you could possibly find in the stock market.
Then, the delays started.
In 2022, management announced there would be delays to build out the exchange’s software capabilities with Exberry and Baymarkets. Their entire tech suite has since been designed from the ground up.
This was initially planned for “Phase 2” of the exchange launch, but they decided to defer commercial activities and pursue further development.
In retrospect, this was obviously the right move and gave them additional optionality in how to build out the exchange and new futures products. At the time, it was not as obvious to us retail investors lol. With that said, I did ultimately trust the vision.
Most investors found the company's communication lackluster, and there was only so much Josh Crumb (CEO) could disclose on Twitter at the time…
After that, there were delays with funding rounds as Abaxx tried to bring in strategic investors. Then there was the CBOE uplisting debacle, followed by delays with onboarding market participants. The list goes on.
To be fair, much of this was ultimately outside of Abaxx’s control. There is a reason no one else has built a commodity exchange and clearing house in over a decade…
The exchange finally launches in June 2024. This marks nearly three years of intellectual torment and a return from a 50%+ illiquid drawdown in the summer of 2022.
Keep in mind, all this does is quell fears that the exchange would never go live. Abaxx still had to contend with the issue of spinning up new markets. Which is no easy task.
This required setting up initial block trades. Additionally, onboarding market participants who are not keen on expending resources unless it passes through the painfully inefficient bureaucratic sniff test.
There is barely any trading activity on the exchange in the first year.
It wasn’t really until March 2026 that we had much activity at all. Gold contract volumes started to explode higher.
And now we find ourselves celebrating the two-year anniversary of the exchange’s launch. Topping it off, a press release about how the exchange just traded 100,000 contracts for the first time.
Setting a new record with gold Singapore futures trading 116,052 contracts on the day.
Yongan International SG has also been onboarded now, a subsidiary of the largest futures group in China.
Abaxx Exchange currently has 11 independent software vendors connected, with 5 more in the pipeline; 7 clearing firms connected, with 14 more in the pipeline; and 22 brokers connected, with 10 more in the pipeline. The network is growing steadily.
They have launched 18 futures contracts across 7 markets. This includes LNG, gold, silver, nickel, lithium, wind, solar, and carbon markets.
The business is firing on all cylinders. The fundamentals have never been better. And yet the stock price has nosedived, like it did in 2022.
Why? A haneously inaccurate short report that was ripped to shreds by retail investors and Abaxx’s management themselves. I recommend watching the conference call on this subject if you haven’t already.
That and possibly the news out from the CFTC allowing perpetual futures, aka “perps,” to be offered by contract markets like Coinbase and Kalshi. More on this topic here.
I truly think it’s a shame many retail investors have likely been shaken out of holding Abaxx because of Viceroy’s short report. Legal action is being taken now, and we will see where that goes over time.
I don’t plan to go through the short report and refute points, as that has already been done by others, bless them. My point with this article is simple…
Many of the investors holding this stock have been in for years now. As long as I have, if not longer.
We have watched this company go from an idea— to a full-fledged exchange with contracts across various markets, a growing ecosystem of exchange participants, and setting new trading records every month…
You could argue the risk-reward has never been better with how much the stock has been derisked.
We are just starting to hit the exponential growth curve.
Why on Earth would you sell now?
I continue to hold, and I scoff at the pitiful lies short sellers have to sling out when trying to get people to sell out of a great business. Don’t give them the satisfaction.
They got their win, you gotta give it to them. But if they mistake that for a long-term trend, I think they will be in for a rude awakening.
Disclaimer: I’m long Abaxx Technologies. I hold an equity position that was acquired at an average share price of $5.51. I was not compensated by the company to create this post.
The owner of Green Investing is not a licensed investment professional. Nothing produced under the Green Investing brand should be construed as investment advice. This content is made for entertainment and educational purposes. Do your own research.