TMX POV - What TSX Venture 50™ Tells Us About Liquidity (And why we are fighting for consolidated data on TSXV)

There are two numbers that put the achievements of the 2025 TSX Venture 50™ into perspective. First, the 50 companies on the list had an average share price increase of 207% during 2024. Then secondly during 2024 these companies created $16.1B of new market capitalization. From a starting point of $5.6B at the beginning of the year, these companies grew to over $21.7B at the end of 2024 through organic growth, financing, and M&A transactions.

These are impressive achievements and the benefits accrue to the employees of the companies and the investors that are backing them. TSX Venture Exchange (TSXV), celebrates the entrepreneurs and employees who drive these results, going beyond the financial returns, including the jobs and other economic and social benefits.

Companies go public for two central reasons:

1. Access to Capital - The 2025 TSX Venture 50™ companies raised $816M in total in 2024.
2. Access to Liquidity - The 2025 TSX Venture 50™ companies had a consolidated value traded of $7.2B during 2024.

It's important to recognize that liquidity has always been a challenge for smaller public companies, but liquidity is considered as part of the three metrics used to rank the companies each year for the TSX Venture 50™ ranking. The more liquid a stock is, the lower the costs can be for investors to access that security, and in some cases, the more comfortable an investor will be to buy a security since they can see an active or "liquid" market that gives them confidence to both buy or sell the security. Liquidity helps to attract capital and investors to a company, while also helping to drive retention of employees and facilitate the evolution of the company's investor base.

In this piece, we will make some observations about the liquidity profile of the 2025 TSX Venture 50™ companies, and also examine the strategic importance of the announcement TMX made last year about making an investment in Consolidated Data Feeds. The goal of this investment by TMX is to enhance the liquidity picture that investors see for all of the listed issuers on our markets.

Liquidity Stats from the 2025 TSX Venture 50™ companies

$2.34 Avg. Share Price as of Dec 31, 2024

27 Issuers with a share price > $1.00 as of December 31, 2024

$145M Avg. Consolidated Value Traded in 2024

$1.3B Highest consolidated value traded in 2024 Artemis Gold Inc. (TSXV:ARTG)

The Importance of Consolidated Data (and why we are fighting for it)

Financial markets aren't static and as they change and evolve we know that the trading regime that underpins our capital markets is competitive and subject to its own evolution. Going back to the late 1990s, Canadian securities regulators followed the lead of the US markets and created a regulatory framework for Alternative Trading Systems (ATSs). ATSs, regulated by provincial securities commissions and CIRO, drive competition and innovation, contributing to liquidity, which is core to the value proposition of the public markets.

For companies trading on Toronto Stock Exchange (TSX) or TSXV, it means there are 20 different trading venues and ATSs that will potentially be facilitating a market for buying and selling an issuer's securities. During 2024, the average TSX or TSXV-listed issuer traded approximately 63% of its volume (excluding intentional crosses) on TMX marketplaces. In the US markets, where there are more than 45 ATSs, the traditional exchanges account for an even lower portion of the overall trading.

What this means is that a corporate stock listed on TSX and TSXV will, on average, trade around 37% of its volume on other trading venues. This market evolution has led to the TMX proposal to show a more complete view of each issuer's liquidity by investing in a data feed that will provide greater visibility on each issuer's trading. The goal is to provide increased visibility on liquidity to help inform Canadian and global investors in their investment decisions. With all development and testing for this initiative now complete, TMX Group is actively collaborating with downstream data vendors. Our focus is on ensuring they finalize any necessary work to expedite and prioritize the widespread adoption of this important enhancement. We know that the ultimate success of this initiative will depend on efforts to engage data vendors to provide this information so it reaches investors.

Conclusion

TSX Venture 50™ is about celebrating the uniqueness of the Canadian public markets, as well as the success stories of companies listed on TSXV, such as stories like Kraken Robotics (TSXV:PNG) from Newfoundland, which has grown over the years from a $10M market capitalization company to one valued at $722M at the end of 2024. Having a vibrant public market that provides both access to capital and liquidity for early-stage growth companies is something that is truly unique to the Canadian economy.

Liquidity is foundational to a well-functioning public market and the value proposition it provides. It is one of the three key metrics we use each year in ranking our top performing issuers. We also recognize that initiatives like Consolidated Data and our advocacy for robust guardrails around short-selling in our markets are critical initiatives that are worth fighting for and that we must continue to move forward.

Footnote

All data is sourced from TSX/TSXV Market Intelligence Group and TMX Markets analysis. All data as of December 31, 2024.

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