Abaxx Technologies Inc. (TSX:ABXX) HOLD — UNDER REVIEW
A real, licensed exchange — but pre-profit, richly valued, down 58%, and facing an unproven short-seller allegation now under regulatory review. Too binary to call either way.
Abaxx runs a Singapore-licensed commodity-futures exchange and clearing house for LNG, carbon and now silver. It is early-stage — about C$1.5M in quarterly revenue and lossmaking. The stock has fallen 58% from its May high to C$28.07, and short-seller Viceroy alleges its trading volumes are largely wash trading. Abaxx denies it and regulators are reviewing. We hold — and we do not treat the allegation as fact.
A real asset, still tiny
Start with what Abaxx actually is, because it is the reason this is a hold and not a sell. It owns something genuinely hard to build: a commodity-futures exchange and clearing house, licensed by Singapore's monetary authority, running physically-settled contracts in LNG, carbon, battery metals and now silver. That is a real, rare asset. The catch is scale — revenue was only about C$1.5M last quarter, and the company still runs at a loss and burns cash while it tries to build genuine trading liquidity. So: a real exchange, but a very early-stage one.
Rich, and the tape is broken
The reason it is not a buy here is price and the tape. Even after falling 58% from its May high, the shares trade at roughly 200 times revenue — extreme for any exchange — and there are no earnings to anchor to. The stock is now sitting on its 52-week low, in a clear downtrend, with no reversal signal yet. Analysts still carry a target near C$86, but those look stale, set before the crash and the short report, so we discount them heavily rather than treat them as a live view.
The dispute that governs it
And everything is overshadowed by one unresolved dispute. The short-seller Viceroy alleges that Abaxx's reported trading volumes are largely wash trading — activity made to look like real liquidity. That is an allegation, not a finding, and it is unproven. Abaxx has categorically denied it, hired the law firm Paul Weiss, and asked Canadian regulators to review the trading. The outcome is genuinely binary: if Abaxx is cleared, the licensed platform can re-rate higher; if the claims are substantiated, the thesis breaks. Until it resolves, there is no conviction either way.
What could go wrong
An adverse regulatory finding breaks the thesis — bear ~C$12. If reported volumes aren't real, the liquidity moat collapses. Pre-profit and cash-burning; the C$60M raise dilutes holders. But if Abaxx is cleared, the licensed platform re-rates.
Risk vs Reward
The verdict
Hold — under review. This is a bet on a binary outcome, not an investment with an edge: a real, licensed exchange that could re-rate toward C$50 if it is cleared, or fall toward C$12 if the allegations are substantiated. We do not score an unproven short report as fact, and we do not buy a rich, pre-profit name into a broken tape and an open regulatory question. Watch the regulatory outcome and the next results.
Read the full report on donatien.ca →
