Q: Somewhat related to an April 23 question asked by Paul F...Kraken has grown and now has a market cap of $2.51 B. Do you still see it as a small cap? With its increased size would you see it as less exposed to what was previously the small cap risk, or does its history as a small cap still make it one to be cautious with? Put another way, if one previously started with a small position and still has it as a relatively smaller weight, should an investor who likes the story be ready to add now that its market cap has grown? Many thanks for your excellent service.
5i Research Answer:
It is a yes and no answer. While PNG is much larger, it has not been "bigger" for very long and we still think it should be treated as a small cap. That being said, with its stock issuance and higher market cap, more institutions have been able to buy shares and its shift to a larger cap does look sustainable. But any stock up 244% in a year is going to be inherently more volatile. Still, we think if an investor has a small position it is OK to add more, but we would clearly not put it into a 'stable blue chip' category yet.