First, let's talk about the 61% decline on Monday: We really think this was a case of investors not paying attention and getting pulled into the FOMO quantum trade. In any special purpose (SPAC) transaction, there are always initial investors and insiders who are allowed to sell after a period of time. This is not new. XNDU registered 293 million shares for sale, and many of these were bought below $10. A price of $49 (where it was on Friday) seemed pretty good to these holders, so everyone sold and drove the price down. But this really should not have been such a big surprise. Still, the volume on the way up (especially in New York) was very high, which implied that the large block of sellable shares could have been absorbed at higher prices. But it could not be. We would call it a combination of greed, hedge fund algorithms and yes, stupidity. From here, we would expect the stock to consolidate and then trade on company news and the quantum sector in general. We think it is getting interesting, but would like to see more of the shares turnover to ensure the early share flippers are gone. Fundamentally, it is still hard to endorse, but if the quantum sector is going to go then it is one of the few Canadian tradeable options within the sector.
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