Vela Technologies’ share price collapsed in 2022 as valuation of technology companies remained under intense pressure globally. The penny stock plunged to a low of 0.0152p in November, which was much lower than its all-time high of 1.7073p. This means that the shares have plunged by more than 98% from its all-time high, giving it a market cap of over 310 million pounds.
Vela Technology is a small AIM-listed investment company that focuses on disruptive technology companies. It has made investments in companies like Mode Global, Cornerstone FS, Kanabo Group, Skillcast Group, and St George Street Capital among others. Most of its holdings are publicly traded companies.
As an investor in technology companies, Vela Technology does well in a period when the tech sector is booming. Recently, however, the opposite has happened as companies battle with numerous challenges like high-interest rates, slow growth, and high inflation. This also explains why Cathie Wood’s Ark Innovation Fund has collapsed.
Vela share price also collapsed as the company assesses its future. In a recent statement, the company said that it would consider a reverse takeover as a way of boosting shareholder returns. Still, it has not talked with any big company for such a transaction.
The most recent results showed that Vela technologies had 3.5 million pounds in assets and 3 million in non-current assets. Its total non-current assets totaled over 6.85 million pounds while total assets pulled back to more than 7.2 million pounds. It also has no debt while its total loss narrowed as it boosted its divestitures.
With the tech industry struggling, it is hard to map how Vela share price will recover in the near term. Besides, interest rates are expected to remain at an elevated level for a long time and the UK economy is set to remain in a recession for a while.
The weekly chart shows that the Vela stock price has been in a strong bearish trend in the past few months. This decline saw it crash below the important support level at 0.030p, which was the lowest level on 1st September. It has moved below all moving averages while the Stochastic Oscillator and the Relative Strength Index (RSI) have moved below the oversold level.
Therefore, the Vela stock price will likely continue falling as sellers target the next key support level at 0.010p. A move above the resistance level at 0.030p will invalidate the bearish view.
This post was last modified on Dec 28, 2022, 09:46 GMT 09:46