It’s no secret these days that the Robinhood trading platform has changed the stock market. A new breed of trader, coordinating over Reddit chats and shooting from the hip, has come to wreak havoc on traditional notions of valuation, market pricing, and the relationship between a publicly traded security and its moorings in fundamental data.
But it would be a dire mistake to believe that the Robinhood army is entirely without rhyme or reason. In fact, these new market participants are often best faulted for bringing immediate momentum to long-term concepts. For example, take a look at a chart of Nikola (NKLA), an electric vehicle play that was recently taken public through a shell merger. The theme is plain enough: the EV shift is inevitable. And it lines up with a passion for younger investors: renewable energy and reduced emissions.
We would suggest a dark horse candidate for a future Robinhood spike in interest: ISW Holdings Inc (OTCMKTS:ISWH): the fundamentals are there, with consistent double-digit sequential quarterly sales growth over a series of quarters and EBITDA profitability as of Q3 2019. But perhaps more importantly, the company is now commercially tied into both renewably energy and cryptocurrency mining.
What do you buy when the government is printing tons of money to escape the vortex of a deflationary economic collapse – and willing to maybe go too far? The old answer is obvious: a certain yellow metal of legendary status.
However, this is a new world. If the Robinhood traders are taking control of asset pricing, then gold is just a useless lump of archaic shiny stuff. The more appreciated alternative to fiat money for these folks is Bitcoin, or any of a menu of cryptocurrency solutions. It’s digital gold.
Both gold and cryptocurrency share the one big property that makes them capable of appreciating when fiat currencies are in rapid supply expansion mode. In other words, they do something important in particular when the Fed’s balance sheet is leaping by trillions or the Federal government is sending out $500B in checks every two weeks with utterly no chance whatsoever to even sort of dream about ever actually paying it back – read: Modern Monetary Theory.
Here’s what they do: stay the same. In the strange world of currencies, there is no ground. Everything is relative. If all fiat currencies simultaneous explode in supply, then chained currencies (like gold and crypto) will mathematically be forced higher because they are priced in – wait for it – Fiat currencies!
It’s not that difficult when you think it through. In any case, Bitcoin and Gold both relate to something like the US Dollar in the same way.
Enter ISW Holdings
As noted above, ISW Holdings Inc (OTCMKTS:ISWH) just announced a new joint venture with Bit5ive LLC, a global leader in cryptocurrency mining and innovative turnkey mining solutions.
According to the release, Bit5ive is an official distribution partner of Bitmain, the industry-leading fabless manufacturer of computing chips and distributor of Antminers to more than 30 countries in Latin America, Central America, and the Caribbean. In addition, Bit5ive is the producer and distributor of POD5 and Power Skid 2.5, the most efficient and successful infrastructure for crypto mining hardware. Bit5ive is quickly becoming one of the largest U.S.-based companies in the cryptocurrency mining and bitcoin farm industry.
This factor pairs up with the company’s recent partnership with Proceso, LLC, which is another strong factor working in ISWH’s favor. The Proceso deal is built around the presumption of a growing need to power technology and systems that drive productivity in our increasingly complex and interconnected world – a world that is also increasingly moving toward renewable energy solutions.
ISW has partnered with Proceso, LLC. to pursue its interest in the creation of high-density processing and mobile datacenters delivering via its network of brokers, partners, suppliers, and clients.
This lines the company up with the emerging Environmental, Social, and Governance (ESG) investment theme, which refers to the three central factors in measuring the sustainability and societal impact of an investment in a company or business. As more and more of the world’s investment capital gets routed through ESG funds, vehicles such as ISWH – which has now aligned itself with the ESG theme – stand to gain greater access to capital support for new endeavors, such as its twin deals with Bit5ive and Proceso.
ISWH is tailormade for the Robinhood army.
We have seen numerous small and micro-cap stocks picked up by this roaming mob of conceptually driven, well-coordinated speculators. Just have a look at IDEX. It is now the number one most popular stock to trade on the Robinhood platform in terms of w/w change in users holding.