Jump to content

KR1.AQ - KR1 Plc


Recommended Posts

My first Investment Idea, so please be gentle.  I'm generally more of a fund researcher.

 

This is an oddity, basically, a portfolio of next-generation blockchain investments.  I see it as a way of taking a view on the future of Crypto, but delegating it to some people who've been in the game for years, and have very good connections in the space.

 

The primary listing is on a tiny specialist London exchange, so it's not very liquid, but fine for most personal investors.  There's also an OTC US listing, though apparently it's 'unofficial' - I'm sure you North American guys will understand this.

 

Back in 2017, I figured that Bitcoin/Crypto was a speculation I would never understand, but that Blockchain technology seemed fascinating, & that something great might come out of it - though I didn't have a clue what it would be.  That's pretty much how I still feel, and KR1 is the best way I've found of expressing that via an investment.  The other 'agnostic' way I can see is via 'Galaxy Digital' but it seems to have a punchy valuation, & there's something about Novogratz which puts me off.

 

The two guys who are in charge have a decent load of shares in the company, & seem fairly humble compared to some of the crypto 'personalities'.

 

To be honest, the best way to understand KR1 in more detail is to read the very comprehensive write-up done by an Irish blogger called Wexboy:

https://wexboy.wordpress.com/2020/11/21/kr1-plc-the-crypto-alpha-bet/


It feels to me like the whole blockchain and 'Defi' space is going to get bigger and bigger - I am reading about more and more hedge fund & VC people getting involved (e.g. UK Macro HF managers, and a16z have a big new fund prepped).  The KR1 guys are not nearly as big as these guys, but they seem to have the respect of their peers to get invited to participate in new investments alongside the big boys.

 

I think everyone knows the whole idea that crypto may be worth a 1-2% asymmetric bet for your portfolio (Horizon Kinetics have written better about this than I can), and KR1 seems like a not-unreasonable way to play this.

Link to comment
Share on other sites

  • Parsad changed the title to KR1.AQ - KR1 Plc
Posted (edited)

A nice little keeper - thankyou for bringing it to the boards attention.

Be very carefull that you fully understand what this investment is, how it makes money, and how you are going to make money from it.

It is not a staight forward buy/hold, and risk management will be key. This isn't going to monetize via a better listing, it is going to be through a sale to a bigger and more liquid player at a NAV discount of 30-50%, and taking your money out via margining. You then need to be able to cover the negative carry until the share price of the bigger player doubles - at which point sell 1/2 the position, and repay the margin.

 

Conservatively expect that most years there will be interim capital raises to fund the next round of vintage, so expect dilution.

To mitigate, ante up during a crash - hopefully a brexit miss-step that temporarily hammers the LSE😀

 

Opportunity!

 

SD

 

Edited by SharperDingaan
Link to comment
Share on other sites

Thank you for the feedback - I appreciate hearing from someone who I know is one the board's experts on crypto (from memory you taught a course on it?).

 

It's an interesting one - and so far they haven't tapped people for capital raises, which has been impressive.  You're absolutely right, it's not a straight forward situation.  Fingers crossed it's a successful one!

Link to comment
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
 Share

×
×
  • Create New...