Thread by @hareng_rouge

I think it's worth revisiting Aquis #AQX here in light of a couple of data points that have since come out.

There are three main parts to the co: a stock exchange (AQSE); a tech licencing biz and their multilateral trading facility (AQXE) - it's this last one I want to look at.

First is the RNS from earlier this month announcing their MTF (investopedia.com/terms/m/multil…) had achieved 6.2% market share. Across the €53.6B traded on AQXE in July, this came out to €1.7B a day.

Those 6.2% and €1.7B are quite significant numbers and I'll come back to them later

In the period since the beginning of 2018 market share has risen from 1.72% to that 6.2% above. Here's how that value traded looks.

This success may be due in part to certain rule-based and technical attributes of AQXE but perhaps also in good part to the company's experimental revenue model. The CEO explains it in interviews using Amazon Prime as an example - in short, subscriptions change consumption habits

The second and perhaps more important data point is this brief mention of AQXE membership numbers in the post-period highlights of the most recent FY report.

The numbers below speak for themselves as to why.

Just as new stores take time to mature as consumers adapt to them, in 3 years the company increased membership numbers by just over a quarter but grew revenues by nearly 4x - and here the store base just expanded significantly

A new cohort will take time to bed in, establish their trading behaviours etc but it's not hard to eyeball a scenario where revenues begin annualising in the mid teens before too long and op lev really kicks in. At the risk of embarrassing myself again..

..I come up with a H1/21 subscription revenue of somewhere between £4.5M - £5.5M depending on the "take rate", which of course doesn't exist given the revenue model :) If, somehow, that's anywhere near correct, it's +20%-50% on the yearly comps and 10%-40% on the sequentials

Put that all together, invent numbers for the other parts and at the low end it could still be something like +20% yearly.

Licencing's for another time but it's an interesting biz - H2/20 bump may be an initiative for Aquis' trading tech into Amazon AWS & Singapore exchange

Significant numbers: Reading up on the arcana of MTFs the TLDR big issue has been that without major sell-side sponsorship, new entrant MTFs fail to get traction and die yet experimental upstart AQX at €1.7B daily is now within shooting distance of mighty LSE's Turquoise at €2B

Whether there's some natural limit to the amount of share market participants would allow a MTF to take or what the response is likely from other operators, IDK but at 6.2% mkt share and 6/7th overall, there's still room for growth if even if that were only from cohort maturation

6.2% share also seems significant because this was more or less the level where BATS bought the Chi-X MTF 10 years ago for $360M according to the WSJ - sold to them by one Alasdair Haynes, founder and CEO of Aquis.

businesswire.com/news/home/2011…

Aquis looks v expensive but just on the sub revs alone I'm not so sure it is. It's already decently CF +ve and whilst I don't know what multiple MTF sub revenue merits, w/the barriers to entry, market success and the growth embedded in the model, I suspect it could be quite high

Trade data posted up by #AQX today perhaps suggesting the start of some decent traction with the sudden new cohort of client members and potentially quite a strong H2

Good results from #AQX. A rise of 20% sequentially in the subscriptions but perhaps more surprising is that +100% in the data line - revenues from the sale of price data from the MTF, commentary suggests the result of a price increase, so presumably this run-rate sticks around