Aquis Exchange (AQX): disruptive multi-bagger?


Mr Mayer has a 100-bagger checklist here;
100-Bagger-checklist.pdf (

I was looking at AQX, Aquis Exchange, as a possibility of a 100 bagger, principally because AQX’s market cap is around 1/220th of the London Stock Exchange Group (LSEG). However it fails on a couple of Chris Mayer’s criteria, notably current valuation and director sales.

AQX has a p/e 202 and trailing twelve month (TTM) pe of 97.8 !! :crazy_face: (but it has only just swung to profit).


I liked the way share-diluted turnover was diverging from direct and admin costs:

I don’t own.




Hi anon

I am an ex-holder of LSEG and did look briefly at AQX when it floated the other year. The economics of (successful) stock exchanges are attractive due to the ‘network effect’ of market participants congregating on a single platform.

AQX’s ‘challenger’ business model appears based mostly on subscription pricing rather than the traditional commission-based-on-trade-size model:

The idea is to attract clients through a lower all-round cost. AQX refers to “message traffic”, which is a term I am not familiar with, but I think generally means ‘executed trades’ (Fee schedule → AQX fee schedule.pdf (62.6 KB)):

• Messages relating to posted (passive) liquidity and Market at Close (MaC) are not counted in the allowance. All other message types are counted as chargeable.

• Where an incoming order matches against a posted order that is already on the Aquis Exchange book, the incoming order is counted as aggressive and therefore chargeable.

Cost per month for unlimited trades is £80k or £960k a year. Presumably anybody paying more to the LSE or similar ought to switch to AQX and pay a fixed £960k. But whether AQX will ever enjoy LSE-type profitability with a cap on its fees is unclear to me.

The recent interims said:

The performance of both Aquis Exchange and Aquis Stock Exchange has progressed well. Exchange revenue increased by £1.2m (33%) from £3.7 million to £4.9 million and the number of Members grew from 31 to 39. In addition, a number of Aquis Exchange Members increased their trading volumes materially, with a 27% increase in the average monthly usage, in terms of chargeable orders (2Q 2021 vs 4Q 2020). This resulted in increased monthly subscriptions. There are now nine Members using the top three subscription pricing tiers and 25 in the other five tiers, with five liquidity providers.

The text suggests eight subscription tiers, which is more than shown within the image above. Assuming the top nine members pay £50k a month = £5.4m a year versus total exchange fees of £4.9m for the latest H1. So AQX is dependent on a handful of larger clients at present… but it is easy to imagine a few more larger clients could really propel revenue and explain the c£180m market cap.

All told, an interesting company, and one I shall cover for SharePad in due course. Thanks for reminding me about it.



Started looking at AQX and found the story quite absorbing. Could actually be a genuine disruptor of sorts. So wrote about the company straight away:

Market cap suggests others really believe the disruptive potential, too. The crowd and I could all be too positive of course.

Found this very useful intro into AQX on the trawls:

I will cheekily notify @DHC_Micro for any further AQX thoughts.



Hello =)

AQX is indeed a very interesting company, and one of the more “difficult holds” in my portfolio at the moment given the high valuation vs current revenue / profits.

A few thoughts, in no particular order:

  1. The fact that they’ve gotten to 6% trading share as a brand new entrant within 10 years of launch is stunning and is a testament to the team @ Aquis.
  2. despite this - the one thing that’s been frustrating is the lack of “inflection point”. Originally, it was argued that when Aquis hit 3% market share, rest of the participants will have no choice but to join because of the “best execution” rules. However, this has not happened. It’s unclear if it ever will, or it will be a hard, linear slog to get to 90 partners. Theoretically, given the network effect dynamics and the strong value proposition, it should, but… we all know the Yogi Berra quote.
  3. It’s clear that the subscription is severely underpriced. Right now, they are in “market penetration mode” but they’ve already raised prices and should continue to do so without any trouble. At the same time, as you’ve pointed out, it’s tough to know how many of the customers will hit the top tier.
  4. The marginal cost of servicing additional customer at this point is close to 0, so the fall through to bottom line should be extremely strong, for the core subscription business. This business should hit above 50%+ EBITDA margin at scale.
  5. The part where I’m having the most struggle with is how the business clearly has numerous highly valuable options, but yet it is almost impossible to value them. NEX, the consolidated tape data rev, software revenue, international expansion - there are all clearly multi-million pound revenue opportunities, at high incremental margins, but timing and true magnitude remain unknown.

Overall - it’s clear that Aquis has built out a rare, valuable and difficult to replicate infrastructure asset, and they have plenty of growth opportunities ahead. But obviously - given the valuation, look out below if they have significant missteps. At this point, I’m sort of just “along for the ride” and have put it in “close your eyes and HODL” part of my portfolio, at a weight which will make me happy if it works out, but won’t cost me sleep if it doesn’t.


hi Maynard

If I understand this correctly…

Wouldn’t this only apply to stocks with a dual listing on LSE and Aquis?

What percentage of shares listed on LSE can also be traded on Aquis?

Shares solely listed on LSE would still need to be traded and paid for on existing LSE terms so no saving on those by paying a subscription to Aquis.



If I can jump in, this link may help

And these companies are listed on Acquis:

So shares can be single listed on Acquis without being listed on the lse. I would think part of the Acquis revenue growth plan is links to their quoted companies growing.

I don’t know how a conflict in the trading rules would work with dual lse and acqis listings.

I read that AJ Bell and HL ostensibly trade in Acquis shares.

I don’t own Acqis personally.




Thanks anon

I had misunderstood and thought that Aquis was only trading stocks that had an Aquis listing / dual listing.

Found this a very interesting share. Clearly very expensive on traditional metrics but plenty of potential upside as a disruptor.

Definitely worth further research.

Snazzy (Peter)

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Hi DHC_Micro

Thanks for your thoughts!

I think ‘best execution’ is an important point to help underpin future growth. Management on the webinars has implied Brexit and the pandemic have perhaps pushed best-execution matters down the agenda for the regulator (and non-AQX members), but best execution is not going away and eventually the regulator (and customers of non-AQX members) should be asking questions on the subject.

Agree with all your other points. If they can ever get to, say, 10% market share despite pushing price increases through in the meantime then the plan would really be working and the shares could be off to the races.



Absolutely, re: “best execution”. The one slight hitch I see is that this might end up being one of those regulations that’s hard to enforce in practice, particularly because there are so many layers between the end client and the trading venue, and proving “best execution” is often very tricky.
On top of this, very few asset managers care enough about saving the extra 5-10bps in order to direct the trades , at the risk of missing out on liquidity.

To be sure , all of this is just in context of “will they hit an inflection point soon?” The original thinking was that this was dependent on Aquis hitting a threshold on market share, but it seems to be more dependent on regulatory action.

My notes from chat w/ Alasdair below… Echoes what you wrote.

  • problem we have - it’s more than pure maths. It’s much more about vested interest.
  • Best Execution is laughable in Europe today because it’s not. I joke and say it’s “Try My Best” execution.
  • Regulators - focused on COVID and Brexit. Not on MiFID. At some point regulators will come back to it. Esp in Europe.
  • What is really best execution and is it being achieved. Answer is no.
  • RTS27 - can look tat data across banks - where they are submitting orders.
  • You can see - when prices are the same, or even worse, they will still put orders into venues where they can get rebate.
  • If you are the client - this is disgraceful. Bank is getting paid your flow is being used and you are into benefiting from it.
  • As we can show and prove that, asset mgmt community is going to start telling the banks where they will place their orders.
  • Today - dealers - very few dealers tell banks what to do. Most will just give order and banks says - we have best SOR and look at this TCA that we produce ourselves.
  • This sort of behaviour that goes on in the marketplace.
  • When is it going to change? Dunno - but at some point, ppl waking up - Aquis is very serious, profitable - and we will continue to grow.
  • Seen it happen - at Chi-X - we hit 3% and grew very quickly and went to 20%.
  • Tougher in this market condition, but absolutely no doubt that we will blow through 10% without any problems and hopefully

On the subject of Aquis: Anyone interested in the crypto scene may want to take a look at KR1. Not the best company name (Kryptonite1) but the two main figures are well respected in the industry and have made some great investments in the space. Announcements - KR1 plc (KR1:AQSE) | Europe’s Leading Digital Asset Investment Company

The only issue I find is that dealing in Aquis companies can be challenging & probably puts investors off to some degree. I hold these from my Selftrade days and now that I have moved to ii by default cannot buy and sell them easily. It was simple with Selftrade. I hope KR1 will move to AIM or somewhere that makes them easier to deal in. However, even the fact that they are crypto related brings some issues with buying and selling. Good thing I plan on holding long term.

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I keep monitoring the number of transactions on Aquis and over the last few years they have kept increasing steadily.
In the past month the average has been around 800k per day. For comparison, CBOE, the biggest player, had 3m transactions/day on average in the same period.

It’s only a matter of time before all players realise it’d be much more cost effective to transact on Aquis as the more orders they send that way, the more their marginal costs reduce.


Hi Pck76,

Thanks for the post and welcome to the forum!

Had a quick look at the AQX website and noticed AQX’s market share has declined since last year: Aquis Exchange monthly statistics 02.2022.pdf (1.0 MB)

Is this something to be concerned about? I am not sure whether AQX loses market share when significant activity occurs in the markets (e.g. March 2020). No doubt my fault, but I could not find the number of transactions conducted AQX’s MTFs, just the value traded.


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Thanks Maynard.

You are looking at market share by value traded, but Aquis doesn’t make money based on value traded: due to their subscription model, they make money based on number of transactions placed by clients.

So in theory when the trade count goes up, it means their customers have to move towards more expensive tiers (I think the “unlimited” costs £80k/month)

Standard exchanges charge a few percentage points of the transaction value.

Re: market share decline during volatile periods, I remember Mr. Haynes, the CEO, saying that many banks have automated systems which keep trading on the exchanges with the highest volumes (even if it costs them more compared to Aquis). If that’s the case then during volatility more orders would be placed on the main markets, therefore generating higher volumes, which in turn would generate more orders etc. A vicious circle, basically.

I look at the data on CBOE:

I’m not sure whether the link works here on the forum. You have to open the page and make sure options/trade count is selected.


Hi Pck76,

Agreed, transaction volumes are what count, but AQX has regularly highlighted the growing market-share-by-value-traded percentage within its presentations and I was surprised to see it reversing and was not sure whether this was a concern.

Revisiting my SharePad article, I wrote:

Management claimed during this webinar (c14 mins) that “over time, you have got to be pretty certain the [trading] bars will grow to where your actual [liquidity] market share is“.

The belief implies Aquis’ market share of trading will eventually grow from 6% to 22% — driven by City rules on ‘best execution’ that demand banks and brokers always seek the best price for their clients.

So I don’t know whether the reduction to market-share-by-value-traded correlates to a lower proportion of market share of liquidity – i.e. AQX no longer offers the best pricing for 22% of the time. Results at the end of the month should shed some light.

Hopefully the rising transaction numbers are from new clients and those moving up the tiers, and not just those on the £80k/mo unlimited deal!

Ok, that’s useful to know. So the systems may not necessarily take into account AQX’s offer of ‘best execution’.

Ah, this link is very useful. Using the 11th of every month, I get 813k for March 2022 and then sub-600k for the 12 months before that save for 619k for May 2021 and 631k for March 2021. So an encouraging step-up during the last few weeks! :+1:


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Good FY 2021 results yesterday:

Revenue up 42%
Pre-tax profit up 540%
Post-tax profit up 330%
Cash £14m

Other promising bits:

  • They now have 39 members (up from 33)
  • There was a 24% increase in average monthly usage, hopefully resulting in some clients moving to more expensive subscription tiers (unfortunately Aquis doesn’t disclose this)
  • revenue from data increased by 159% to £2.3m.

By the way on the data front: the “consolidated tape” at EU Level could be worth £100m/year…

This would be distributed between participants (Aquis, cboe etc) based on market share. So in theory there is another ~£5m in data revenue in the future :crossed_fingers:

Hi Pck76,

Progress not super with the Members. The FY 2020 presentation revealed 33 Members at December 2020 and 39 Members as at March 2021.

The HY 2021 presentation then revealed “9 Members in top three tiers & 25 Members in the other five tiers, with 5 liquidity providers

This FY 2021 presentation then revealed " 9 Members in top three tiers and 25 Members in the other five tiers, with 5 liquidity providers – seeing positive movement between tiers"

Membership therefore does not appear to have increased since this time last year, and none of the 25 in the lower tiers have progressed into the higher tiers. Sure, AQX is seeing “positive movement between tiers”, but nothing positive enough to shift a few into the top tiers (at least of late).

The FY 2021 presentation included new text about “Increased data analytics” and “Improved positioning of Aquis’ strengths” to help drive usage towards the top tiers.

The lack of Membership movement may be reflected by Trading revenue during H2 just matching the £4.9m witnessed during H1:

Without new Members and/or Members really moving up the tiers, I wonder whether Trading revenue can show decent growth for 2022.

This was explained in the webinar below (13m55s)

Essentially when markets become volatile, “proprietary traders trade more”, volumes go up but AQX’s market share declines because AQX does not handle such ‘prop’ trades. AQX says market share is therefore a “less good” metric in volatile markets.

Also noted was AQX having six of its top ten trading days by value during the last month, and saying it was fair to assume the message traffic numbers will be higher as well. So that seems promising.

And I am sure AQX said in the webinar a target market share remained 10%.

Also, the results notes said the AQXE/AQEU venues generated revenue of £10.9m and a profit of £2.1m, versus £7.9m and £1.2m for 2020. So extra AQXE/AQEU revenue of £3m converting into extra profit of £0.9m, which shows a good incremental margin and the all-important economies of scale.

This line was interesting:

The trade receivables resulting from revenue from licensing technology contracts attract an IFRS 9 (impairment provision on the trade receivables arising from contract assets). This year the application of IFRS 9 has resulted in an impairment provision during the year of £972k (2020: £109k).

Looks like H2 saw a £1.15m impairment provision for licensing revenue, which seems hefty given such revenue was £4.4m for the year and £4.0m for H2.

Also this line:

Gross revenue from 2 customers amounted to £3,785k (2020: £117k) arising from licence and maintenance fees.

So two customers represented £3.8m of £4.4m licensing revenue, of which that impairment suggests c£1m of that £4.4m seems unlikely to be paid. Not ideal for the licensing division to be dependent on a handful of customers with questions over collecting payments.