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November 2nd, 2022 | 11:29 CET

Castles in the Air to Cash Cows: Meta Platforms, Desert Gold, Varta

  • Mining
  • Gold
  • metaverse
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When Microsoft launched the first version of Windows decades ago, the Company was just one of many in the market for IT systems. When Apple introduced the iPhone, representatives of Nokia, among others, smiled at the novel phone without buttons. And today? Microsoft is the leader in PC operating systems, and phones without buttons are the absolute standard. We look at three stocks and analyze where today's castles in the air could become tomorrow's Cash Cows.

time to read: 4 minutes | Author: Nico Popp
ISIN: FACEBOOK INC.A DL-_000006 | US30303M1027 , DESERT GOLD VENTURES | CA25039N4084 , VARTA AG O.N. | DE000A0TGJ55

Table of contents:

    Brodie Sutherland, CEO, Tocvan Ventures
    "[...] One focus will be on deposits near the surface. These would be good arguments for a quick production decision using the low-cost heap leaching method. [...]" Brodie Sutherland, CEO, Tocvan Ventures

    Full interview


    Meta Platforms: Do users go along with Zuckerberg's plans?

    Mark Zuckerberg hardly ever appears truthful these days. As a rule, the billionaire and Facebook founder lets his avatar do the talking. The avatar looks much like Zuckerberg but a little more whimsical. These public appearances are part of an image campaign intended to help both Zuckerberg himself and the giant Metaverse project. The Facebook data scandal and Zuckerberg's ice-cold appearances in hearings have tarnished the public image of the resourceful businessman. But since many things in our lives today are expected to migrate to the metaverse in the future, PR strategists are in demand. Because one thing is sure: without users, the metaverse cannot be a success.

    Zuckerberg's parallel world is designed based on data glasses. Anyone with a pair of data glasses can dive into the metaverse and work in an office with an ocean view, for example, or have friendly conversations with people from all over the world in the midst of fascinating nature. As the creator of the Metaverse, the Facebook successor company Meta could earn a lot of money from this parallel world. Indeed, the Metaverse sounds exciting - who would not like to have their workspace with them at all times? But it gets complicated when it comes to leisure activities in the virtual world. Many people are already turning their backs on Facebook, Instagram and WhatsApp. Whether the Metaverse will be a hit as a monopoly event is still uncertain. Since Meta's previous business is also weakening at the same time, and the expansion plans are eating up a lot of money, the share remains a speculative bet. It is not a foregone conclusion that Zuckerberg's company will play a leading role in the network of the future.

    Desert Gold: This development misses the market

    In times when tech companies worth billions want to create the world of tomorrow and have plans for their own currencies already in the drawer, more and more people are turning to tangible values. In times of crisis, the vegetable patch and the fruit tree in the garden are worth something again. Gold, too, continues to be rightly regarded as a tangible crisis currency for which neither banks nor a blockchain are needed. The Canadian gold prospector Desert Gold Ventures operates in Mali on the border with Senegal and has a 440 sq km area, namely the SMSZ project. A few months ago, Desert Gold published a resource estimate with more than 1 million ounces of gold.

    Due to further attractive exploration zones and the size of the project, the resources reported so far are only the beginning. Especially the Gourbassi West North area is promising - in summer, results of 1.91 g/t gold over 32 meters and 1.02 g/t over 49 meters were published. According to Desert Gold itself, no exploration zone on its SMSZ project has progressed at such a rapid pace. Since Gourbassi West North has not yet been included in the resource estimate, a kind of "hidden reserve" is being created here, which should be lifted with the next update of the resource estimate. Since the valuation of the Desert Gold share has also steadily decreased in parallel, investors can lie in wait. In the event of a gold comeback, Desert Gold should quickly become a hot number again. In any case, there is substance, and the share is anything but a castle in the air at current prices.

    Varta: First, a castle in the air, then a shambles

    The Varta share shows what can happen when companies rush to build castles in the air during hype phases on the stock market. The Company, which has made a good name for itself with its button cells and has always been considered very solid, decided a few years ago to expand into the field of batteries for electric cars. Since then, nothing has happened for a long time. Now there are details.

    Varta's battery is supposed to serve as a "booster" and give that "extra boost" to sports cars, for example. In the meantime, however, the market has changed. The long wait for Varta's concrete e-car plans has worn down analysts and investors. The share price crumbled and crumbled, finally crashing in September after a profit warning. Since then, the stock has come to rest between EUR 26 and EUR 28. After trading at more than EUR 170 as recently as early 2021, Varta will likely need some time to consolidate. The castle in the air is followed by the chaos at Varta.

    While it is not clear at Varta how the battery plans can concretely affect the business, especially since there is also competition, the situation at Meta Platforms is even more confusing. While virtual worlds certainly offer potential, users are increasingly skeptical about leaving these worlds to the monopolists. Meanwhile, the crisis and substitute currency gold has an unchallenged monopoly position. Independent of central banks and billionaires, the precious metal has a value that has endured for millennia. Desert Gold's stock offers access to unmined gold deposits and, at the same time, holds a few surprises. Those who think speculatively may want to take a closer look at the value.

    Conflict of interest

    Pursuant to §85 of the German Securities Trading Act (WpHG), we point out that Apaton Finance GmbH as well as partners, authors or employees of Apaton Finance GmbH (hereinafter referred to as "Relevant Persons") may hold shares or other financial instruments of the aforementioned companies in the future or may bet on rising or falling prices and thus a conflict of interest may arise in the future. The Relevant Persons reserve the right to buy or sell shares or other financial instruments of the Company at any time (hereinafter each a "Transaction"). Transactions may, under certain circumstances, influence the respective price of the shares or other financial instruments of the Company.

    In addition, Apaton Finance GmbH is active in the context of the preparation and publication of the reporting in paid contractual relationships.

    For this reason, there is a concrete conflict of interest.

    The above information on existing conflicts of interest applies to all types and forms of publication used by Apaton Finance GmbH for publications on companies.

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    Der Autor

    Nico Popp

    At home in Southern Germany, the passionate stock exchange expert has been accompanying the capital markets for about twenty years. With a soft spot for smaller companies, he is constantly on the lookout for exciting investment stories.

    About the author

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