A piece by Charles Archer13 Jun 2026 16:12
Good Morning Team.
I spent most of last week watching many of the stocks in my portfolio fall. Not dramatically - just a few percent, on low liquidity.
And in most cases, for no fundamental reason at all.
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Here’s a life lesson for the small cap investor stressing about this.
Conviction is easy. It costs you absolutely nothing to tell your friends, your family, your wife or perhaps your bathroom mirror, that you believe in a company’s thesis with 100% confidence.
Until the share price falls.
That’s the moment — not the RNS, not the results, not the management presentation where the CEO uses the word ‘transformational’ four times in eight minutes — which defines you as an investor.
And last week, things were falling.
Perfect storm for small caps
Yesterday was SpaceX IPO day.
$75 billion raised at $135 a share. The largest IPO in market history — blowing well past Saudi Aramco. The Nasdaq is fast-tracking its index inclusion, which means passive funds, pension funds and retirement accounts have to buy it whether they like the valuation or not.
That is $75 billion — conservatively — being hoovered out of the broader market and pointed at a single ticker. And with OpenAI and Anthropic both having filed their own paperwork, the mega-IPO pipeline isn’t going anywhere this summer.
If you’re sitting there wondering why your AIM junior hasn’t moved despite a perfectly decent update, there’s part of your answer. The gravitational pull of a $1.77 trillion listing doesn’t leave much oxygen for a £30 million market cap copper explorer in Nicaragua.
But this is only the top end of the market.
On the bottom end, I’m aware of >20 AIM companies currently in the market raising capital for new IPOs or RTOs.
Placings, open offers, subscriptions — all of them simultaneously competing for the same pool of retail and institutional money. Brokers are busy. Fund managers are being asked to make decisions.
Allocation committees are grinding through decks, and two hopefuls (with decent investment cases) have already been pushed into September because the capital simply doesn’t exist.
In this environment, the marginal buyer simply doesn’t have the bandwidth (or frankly, the cash) to support everything at once. Any cash they might use to support currently listed companies is going to fund the new ones.
So prices drift. Bid-offer spreads widen.
Volume dries up.
And anything without a near-term catalyst slowly bleeds.
And then — right on cue — summer arrives.
The school holidays are weeks away. The fund managers are booking the annual villa in Tuscany. The market makers are covering their positions and going nowhere near anything illiquid.
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