There are reasons why things are the way they are and sometimes that needs to be asked why. If you are acclimatized in taking anything and everything at face value in a 5 worded post, then this article is not for you because it contains fact. We are going to talk about the TSX Venture Composite Index.

Here are 2 charts over a one-year period.

The TSX Composite Index,

and the TSX Venture Composite Index,


The TSX chart shows continual growth as what you would expect to see in an index and the TSX Venture chart is a little more complicated. Aside from tending to be affected by seasonality (something to be discussed at another time), the Venture is not finite. Meaning issuers that perform well tend to become targets for mergers and acquisitions, or choose to graduate to the TSX or another exchange.

Just looking at this last year from Oct 1, 2023. Over $6.5b in valuation has left the venture. 7 issuers graduated to the TSX, 2 graduated to the Nasdaq and 11 chose to leave the venture for the CSE, CBOE or ASX. Another 36 companies were subject to mergers or acquisitions. Only 14 companies either delisted voluntarily or were delisted from failing to maintain exchange requirements.


Granted, not all of these companies that left the Venture were on the Composite Index, which is based on a weighted system. To provide a little further breakdown, since July 1st 2024, 4 companies worth a combined $2.2b left the TSX Venture.

Osino Resources Corp – $345 million acquired by Shanjin International Gold

Adventus Mining Corp – $209 million acquired by Silvercorp Metals Inc

Reunion Gold Corp – $943million merged with G Mining

IsoEnergy Ltd – $690 million graduated to the TSX exchange


Many people didn’t know that the TSX Venture Composite index changed the way that it is calculated in April 2022. To just look at a historic chart and compare to yesteryear is really looking at two very different pictures. Currently there are 125 issuers on the Composite Index under a new weighted system. Before 2022, there were roughly 400 companies. Having no real weighted system and higher valued companies, when one graduated or was acquired, it was replaced with something valued substantially lower.

So next time you see a chart being posted with some negative connotation, take the time to understand why some things are the way they are. The TSX Venture is what it is and is full of winners and losers. The winners don’t always get talked about, because they are generally no longer present. There are still things that are negative about the Venture Exchange and there are solutions to make things better, but the changes need to start at the top.


Disclaimer:

I have not been been compensated by the TSX Venture.     

Use your game sense, play within it.  It's a dangerous game out there and you can lose everything.