Everyone likes a good podcast right?
From wine mums’ insatiable appetite for true crime to football lads hanging onto every word Crouchie has to say, episodic audio streaming has taken over the cultural world since the mid-2010s boom.
So why has podcast distribution platform Audioboom Group PLC (AIM:BOOM) consistently underperformed on the AIM market?
The London-based group’s share price has plummeted over 90% from its all-time high in April of last year, with this Friday’s disappointing trading update sending the stock over 25% lower in a single day.
Despite setting a new record of 135mln global monthly downloads this May, Audioboom has had to downgrade its revenue and EBITDA forecasts for the current financial year.
Per the update, the group said it “has adjusted the approach taken to calculating its minimum guarantee offers for podcast partners”.
Or in plainer terms: Audioboom will start paying podcasters less.
This mismatch between surging listenership numbers and lack of profitability underscores the biggest problem in the podcast industry: No one has quite figured out how to make any money, aside from an exclusive few (*cough* Joe Rogan’s US$200mln deal with Spotify *cough*).
Furthermore, the UK has not quite jumped on the podcast bandwagon to the extent of the US or Asia. Compared to 22% in the US and a cracking 58% in South Korea, only 12.5% of Brits listens to podcasts on a weekly basis (as of 2020 anyway).
A lack of advertising revenue appears to be Audioboom’s biggest problem, and while the group says it is in a prime position to take advantage when the advertising markets improve, for now, shareholders are looking at a fairly bearish share price.
Inflation and interest rates smash market
Looking at the wider market performance this week, the AIM All Share Index closed the week 2.85% down at 770, slightly underperforming the FTSE 100 blue-chip index.
To no one’s surprise, the double blow of sticky inflation numbers on Wednesday and a meaty 50bps rate hike on Thursday pulled the market lower.
At least stronger-than-expected retail numbers offered a bit of good news. Despite the doom and gloom around inflation, UK consumer confidence actually ticked a few points higher.
Sticking with the fallers, Hotel Chocolat Group was also out of favour with investors this week as the AIM-listed purveyor of pricey treats issued a fresh profit warning following one in April.
Shares fell 17% on Friday after the company said it expects a "minor loss" this year and lower sales and profits next year as cost efficiencies come through slower than expected.
Concrete laser screed company Somero Enterprises Inc also issued a profit warning, announcing on Tuesday that it expects full-year revenues to fall and underlying earnings (EBITDA) to come in below consensus.
Somero’s shares were seen around 11% lower by the end of the week.
SRT Marine Systems PLC (LSE:SRT) sunk 12% lower after it announced plans to raise up to £3.95mln, diluting shares in the process, while Capital Metal fell by nearly 50% after announcing its own share placement at a significant discount.
Other bearish movers this week included Haydale Graphene at -9% due to project delays; Esken Ltd (LSE:ESKN, OTC:ESKNF) at 19.5% after announcing the sale of the Southend airport; and Falcon Oil & Gas at a savage 42% after a disappointing update on its Amungee NW-2H well in Australia.
Upside abound in litigation, minerals and tech
There was plenty of upside to go around on the AIM market too.
Litigation Capital Management had a bumper week. The company makes money by helping fund expensive legal cases, hoping to make a return if the action is successful.
A great example of a successful investment was the US$67.6mln yielded from the US$9.2mln ploughed into a suit heard at the London Court of International Arbitration. The shares jumped 23%.
Chill Brands Group closed the week 8% higher after the company announced the expansion of its Chill.com product marketplace. The group said it has signed a deal with Valet Seller, an e-commerce accelerator supporting over 500 direct-to-consumer brands.
Cloud-based software company i-nexus Global plc hit a 14% rally following news of a proposal to raise £500,000 through a debt issuance to shareholders.
Net proceeds will be applied entirely toward meeting the company's ongoing working capital requirements.
Biome Technologies PLC (AIM:BIOM) was another strong performer in the tech sector. Shares rose nearly 6% higher on Thursday morning as the leading bioplastics and radio frequency technology business revealed a contract win by a subsidiary.
Offshore energy technology provider Tekmar Group PLC (AIM:TGP) jumped 22% on the back of its interim results issued on Wednesday. Tekmar’s gross margins increased while underlying losses contracted sharply.
Other top risers in the heavy industries included Zanaga Iron Ore, Panthera Resources, Coro Energy and Arkle Resources, all of which enjoyed double-digit gains.
But the true winner in the small-cap space was surely main market-listed RC365 Holding, which jumped a stunning 140% after news broke that its subsidiary Regal Crown is tipped to sign a collaboration agreement with Hatcher Group Limited to develop AI solutions for its digital wealth management applications.
Investors eye up Strategic Minerals bargain
Finally, those with an eye for a bargain will probably be on the same page as investors pecking around Strategic Minerals, up 11.3% in the last month.
Its revenues and profits are generated from processing iron ore stockpiles in New Mexico.
However, the sleeper in the company’s portfolio is the Redmoor tungsten-tin project, closer to home in Cornwall.
Both metals are on the government’s critical minerals list, while international demand is growing along with the expansion of the electronic sector.
Restrictions on existing tin production in Myanmar and Indonesia place a premium on up-and-coming assets such as Redmoor.